Correlation Between FactSet Research and American Express
Can any of the company-specific risk be diversified away by investing in both FactSet Research and American Express at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining FactSet Research and American Express into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FactSet Research Systems and American Express, you can compare the effects of market volatilities on FactSet Research and American Express and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in FactSet Research with a short position of American Express. Check out your portfolio center. Please also check ongoing floating volatility patterns of FactSet Research and American Express.
Diversification Opportunities for FactSet Research and American Express
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FactSet and American is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding FactSet Research Systems and American Express in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Express and FactSet Research is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on FactSet Research Systems are associated (or correlated) with American Express. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Express has no effect on the direction of FactSet Research i.e., FactSet Research and American Express go up and down completely randomly.
Pair Corralation between FactSet Research and American Express
Considering the 90-day investment horizon FactSet Research Systems is expected to generate 0.77 times more return on investment than American Express. However, FactSet Research Systems is 1.3 times less risky than American Express. It trades about -0.11 of its potential returns per unit of risk. American Express is currently generating about -0.22 per unit of risk. If you would invest 47,212 in FactSet Research Systems on December 1, 2024 and sell it today you would lose (1,038) from holding FactSet Research Systems or give up 2.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FactSet Research Systems vs. American Express
Performance |
| Timeline |
| FactSet Research Systems |
| American Express |
FactSet Research and American Express Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FactSet Research and American Express
The main advantage of trading using opposite FactSet Research and American Express positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FactSet Research position performs unexpectedly, American Express can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in American Express will offset losses from the drop in American Express' long position.| FactSet Research vs. Dun Bradstreet Holdings | FactSet Research vs. Moodys | FactSet Research vs. MSCI Inc | FactSet Research vs. Intercontinental Exchange |
| American Express vs. Visa Class A | American Express vs. PayPal Holdings | American Express vs. Capital One Financial | American Express vs. Upstart Holdings |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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