Correlation Between FactSet Research and Capital Clean

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

Diversification Opportunities for FactSet Research and Capital Clean

-0.69

Correlation Coefficient

FactSet Research  Capital Clean

Excellent diversification

The 3 months correlation between FactSet and Capital is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding FactSet Research Systems and Capital Clean Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Clean Energy 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 Capital Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Clean Energy has no effect on the direction of FactSet Research i.e., FactSet Research and Capital Clean go up and down completely randomly.

Pair Corralation between FactSet Research and Capital Clean

Considering the 90-day investment horizon FactSet Research Systems is expected to under-perform the Capital Clean. But the stock apears to be less risky and, when comparing its historical volatility, FactSet Research Systems is 1.47 times less risky than Capital Clean. The stock trades about -0.1 of its potential returns per unit of risk. The Capital Clean Energy is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  1,819  in Capital Clean Energy on December 29, 2024 and sell it today you would earn a total of  160.00  from holding Capital Clean Energy or generate 8.8% return on investment over 90 days.

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

FactSet Research Systems  vs.  Capital Clean Energy

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 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.

Capital Clean Energy

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Capital Clean Energy are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical and fundamental indicators, Capital Clean may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with FactSet Research and Capital Clean

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

The idea behind FactSet Research Systems and Capital Clean Energy 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.