Correlation Between FactSet Research and Persimmon Plc

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

Diversification Opportunities for FactSet Research and Persimmon Plc

-0.12

Correlation Coefficient

FactSet Research  Persimmon Plc

Good diversification

The 3 months correlation between FactSet and Persimmon is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding FactSet Research Systems and Persimmon Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Persimmon Plc 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 Persimmon Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Persimmon Plc has no effect on the direction of FactSet Research i.e., FactSet Research and Persimmon Plc go up and down completely randomly.

Pair Corralation between FactSet Research and Persimmon Plc

Considering the 90-day investment horizon FactSet Research Systems is expected to under-perform the Persimmon Plc. But the stock apears to be less risky and, when comparing its historical volatility, FactSet Research Systems is 2.31 times less risky than Persimmon Plc. The stock trades about -0.1 of its potential returns per unit of risk. The Persimmon Plc is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  2,957  in Persimmon Plc on December 30, 2024 and sell it today you would earn a total of  180.00  from holding Persimmon Plc or generate 6.09% return on investment over 90 days.

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

FactSet Research Systems  vs.  Persimmon Plc

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.

Persimmon Plc

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Persimmon Plc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile primary indicators, Persimmon Plc may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with FactSet Research and Persimmon Plc

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

The idea behind FactSet Research Systems and Persimmon Plc 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.