Correlation Between FactSet Research and Safety Shot

Can any of the company-specific risk be diversified away by investing in both FactSet Research and Safety Shot 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 Safety Shot 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 Safety Shot, you can compare the effects of market volatilities on FactSet Research and Safety Shot 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 Safety Shot. Check out your portfolio center. Please also check ongoing floating volatility patterns of FactSet Research and Safety Shot.

Diversification Opportunities for FactSet Research and Safety Shot

-0.81

Correlation Coefficient

FactSet Research  Safety Shot

Pay attention - limited upside

The 3 months correlation between FactSet and Safety is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding FactSet Research Systems and Safety Shot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safety Shot 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 Safety Shot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safety Shot has no effect on the direction of FactSet Research i.e., FactSet Research and Safety Shot go up and down completely randomly.

Pair Corralation between FactSet Research and Safety Shot

Considering the 90-day investment horizon FactSet Research Systems is expected to generate 0.25 times more return on investment than Safety Shot. However, FactSet Research Systems is 3.95 times less risky than Safety Shot. It trades about 0.12 of its potential returns per unit of risk. Safety Shot is currently generating about -0.14 per unit of risk. If you would invest  45,470  in FactSet Research Systems on September 26, 2024 and sell it today you would earn a total of  3,665  from holding FactSet Research Systems or generate 8.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

FactSet Research Systems  vs.  Safety Shot

FactSet Research Systems

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in FactSet Research Systems are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental indicators, FactSet Research may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Safety Shot

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Safety Shot has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with FactSet Research and Safety Shot

The main advantage of trading using opposite FactSet Research and Safety Shot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FactSet Research position performs unexpectedly, Safety Shot 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 Safety Shot will offset losses from the drop in Safety Shot's long position.

The idea behind FactSet Research Systems and Safety Shot 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.

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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.