Correlation Between Aterian and FactSet Research

Can any of the company-specific risk be diversified away by investing in both Aterian 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 Aterian and FactSet Research into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aterian and FactSet Research Systems, you can compare the effects of market volatilities on Aterian 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 Aterian with a short position of FactSet Research. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aterian and FactSet Research.

Diversification Opportunities for Aterian and FactSet Research

-0.52

Correlation Coefficient

Aterian  FactSet Research

Excellent diversification

The 3 months correlation between Aterian and FactSet is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Aterian 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 Aterian 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 Aterian 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 Aterian i.e., Aterian and FactSet Research go up and down completely randomly.

Pair Corralation between Aterian and FactSet Research

Given the investment horizon of 90 days Aterian is expected to under-perform the FactSet Research. In addition to that, Aterian is 1.95 times more volatile than FactSet Research Systems. It trades about -0.33 of its total potential returns per unit of risk. FactSet Research Systems is currently generating about -0.01 per unit of volatility. If you would invest  49,001  in FactSet Research Systems on September 24, 2024 and sell it today you would lose (164.00) from holding FactSet Research Systems or give up 0.33% of portfolio value over 90 days.

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

Aterian  vs.  FactSet Research Systems

Aterian

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aterian has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's technical and fundamental indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

FactSet Research Systems

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in FactSet Research Systems are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental indicators, FactSet Research is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Aterian and FactSet Research

The main advantage of trading using opposite Aterian and FactSet Research positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aterian 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 Aterian 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.

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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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.