Correlation Between Cboe Global and FactSet Research

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

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

Diversification Opportunities for Cboe Global and FactSet Research

-0.67

Correlation Coefficient

Cboe Global  FactSet Research

Excellent diversification

The 3 months correlation between Cboe and FactSet is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Cboe Global Markets 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 Cboe Global 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 Cboe Global Markets 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 Cboe Global i.e., Cboe Global and FactSet Research go up and down completely randomly.

Pair Corralation between Cboe Global and FactSet Research

Given the investment horizon of 90 days Cboe Global Markets is expected to generate 1.37 times more return on investment than FactSet Research. However, Cboe Global is 1.37 times more volatile than FactSet Research Systems. It trades about 0.12 of its potential returns per unit of risk. FactSet Research Systems is currently generating about -0.2 per unit of risk. If you would invest  19,595  in Cboe Global Markets on December 25, 2024 and sell it today you would earn a total of  1,882  from holding Cboe Global Markets or generate 9.6% return on investment over 90 days.

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

Cboe Global Markets  vs.  FactSet Research Systems

Cboe Global Markets

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cboe Global Markets are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Cboe Global may actually be approaching a critical reversion point that can send shares even higher in April 2025.

FactSet Research Systems

Risk-Adjusted Performance

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 weak performance in the last few months, the Stock's fundamental indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Cboe Global and FactSet Research

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

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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..