Correlation Between FactSet Research and Grupo Aeroportuario

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

Diversification Opportunities for FactSet Research and Grupo Aeroportuario

-0.48

Correlation Coefficient

FactSet Research  Grupo Aeroportuario

Very good diversification

The 3 months correlation between FactSet and Grupo is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding FactSet Research Systems and Grupo Aeroportuario del in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Aeroportuario del 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 Grupo Aeroportuario. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Aeroportuario del has no effect on the direction of FactSet Research i.e., FactSet Research and Grupo Aeroportuario go up and down completely randomly.

Pair Corralation between FactSet Research and Grupo Aeroportuario

Considering the 90-day investment horizon FactSet Research Systems is expected to generate 0.8 times more return on investment than Grupo Aeroportuario. However, FactSet Research Systems is 1.25 times less risky than Grupo Aeroportuario. It trades about 0.14 of its potential returns per unit of risk. Grupo Aeroportuario del is currently generating about -0.04 per unit of risk. If you would invest  43,895  in FactSet Research Systems on September 12, 2024 and sell it today you would earn a total of  4,483  from holding FactSet Research Systems or generate 10.21% return on investment over 90 days.

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

FactSet Research Systems  vs.  Grupo Aeroportuario del

FactSet Research Systems

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in FactSet Research Systems are ranked lower than 10 (%) 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.

Grupo Aeroportuario del

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grupo Aeroportuario del has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Grupo Aeroportuario is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with FactSet Research and Grupo Aeroportuario

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

The idea behind FactSet Research Systems and Grupo Aeroportuario del 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.