Correlation Between FactSet Research and Arthur J

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

Diversification Opportunities for FactSet Research and Arthur J

0.26

Correlation Coefficient

FactSet Research  Arthur J

Modest diversification

The 3 months correlation between FactSet and Arthur is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding FactSet Research Systems and Arthur J Gallagher in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arthur J Gallagher 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 Arthur J. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arthur J Gallagher has no effect on the direction of FactSet Research i.e., FactSet Research and Arthur J go up and down completely randomly.

Pair Corralation between FactSet Research and Arthur J

Considering the 90-day investment horizon FactSet Research is expected to generate 2.12 times less return on investment than Arthur J. In addition to that, FactSet Research is 1.17 times more volatile than Arthur J Gallagher. It trades about 0.03 of its total potential returns per unit of risk. Arthur J Gallagher is currently generating about 0.07 per unit of volatility. If you would invest  15,491  in Arthur J Gallagher on January 30, 2024 and sell it today you would earn a total of  7,920  from holding Arthur J Gallagher or generate 51.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.6%
Values	Daily Returns

FactSet Research Systems  vs.  Arthur J Gallagher

FactSet Research Systems

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FactSet Research Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Arthur J Gallagher

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Arthur J Gallagher are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable forward-looking indicators, Arthur J is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with FactSet Research and Arthur J

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

The idea behind FactSet Research Systems and Arthur J Gallagher 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.