Correlation Between FactSet Research and SES SA

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

Diversification Opportunities for FactSet Research and SES SA

-0.73

Correlation Coefficient

FactSet Research  SES SA

Pay attention - limited upside

The 3 months correlation between FactSet and SES is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding FactSet Research Systems and SES SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SES SA 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 SES SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SES SA has no effect on the direction of FactSet Research i.e., FactSet Research and SES SA go up and down completely randomly.

Pair Corralation between FactSet Research and SES SA

Considering the 90-day investment horizon FactSet Research Systems is expected to generate 0.22 times more return on investment than SES SA. However, FactSet Research Systems is 4.46 times less risky than SES SA. It trades about 0.19 of its potential returns per unit of risk. SES SA is currently generating about -0.1 per unit of risk. If you would invest  42,574  in FactSet Research Systems on September 3, 2024 and sell it today you would earn a total of  6,493  from holding FactSet Research Systems or generate 15.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.31%
Values	Daily Returns

FactSet Research Systems  vs.  SES SA

FactSet Research Systems

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in FactSet Research Systems are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental indicators, FactSet Research unveiled solid returns over the last few months and may actually be approaching a breakup point.

SES SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SES SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with FactSet Research and SES SA

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

The idea behind FactSet Research Systems and SES SA 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.