Correlation Between Pool and FactSet Research
Can any of the company-specific risk be diversified away by investing in both Pool and FactSet Research 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 Pool and FactSet Research into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pool Corporation and FactSet Research Systems, you can compare the effects of market volatilities on Pool and FactSet Research 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 Pool with a short position of FactSet Research. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pool and FactSet Research.
Diversification Opportunities for Pool and FactSet Research
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pool and FactSet is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Pool Corp. and FactSet Research Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FactSet Research Systems and Pool 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 Pool Corporation are associated (or correlated) with FactSet Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FactSet Research Systems has no effect on the direction of Pool i.e., Pool and FactSet Research go up and down completely randomly.
Pair Corralation between Pool and FactSet Research
Given the investment horizon of 90 days Pool is expected to generate 1.13 times less return on investment than FactSet Research. In addition to that, Pool is 1.71 times more volatile than FactSet Research Systems. It trades about 0.14 of its total potential returns per unit of risk. FactSet Research Systems is currently generating about 0.27 per unit of volatility. If you would invest 45,929 in FactSet Research Systems on August 28, 2024 and sell it today you would earn a total of 3,176 from holding FactSet Research Systems or generate 6.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pool Corp. vs. FactSet Research Systems
Performance |
| Timeline |
| Pool |
| FactSet Research Systems |
Pool and FactSet Research Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pool and FactSet Research
The main advantage of trading using opposite Pool and FactSet Research positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pool position performs unexpectedly, FactSet Research 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 FactSet Research will offset losses from the drop in FactSet Research's long position.The idea behind Pool Corporation and FactSet Research Systems pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| FactSet Research vs. Dun Bradstreet Holdings | FactSet Research vs. Moodys | FactSet Research vs. MSCI Inc | FactSet Research vs. Nasdaq Inc |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |