Correlation Between FactSet Research and SP Global

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

Diversification Opportunities for FactSet Research and SP Global

0.18

Correlation Coefficient

FactSet Research  SP Global

Average diversification

The 3 months correlation between FactSet and SPGI is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding FactSet Research Systems and SP Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SP Global 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 SP Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SP Global has no effect on the direction of FactSet Research i.e., FactSet Research and SP Global go up and down completely randomly.

Pair Corralation between FactSet Research and SP Global

Considering the 90-day investment horizon FactSet Research Systems is expected to under-perform the SP Global. But the stock apears to be less risky and, when comparing its historical volatility, FactSet Research Systems is 1.24 times less risky than SP Global. The stock trades about -0.1 of its potential returns per unit of risk. The SP Global is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  49,712  in SP Global on December 28, 2024 and sell it today you would earn a total of  1,152  from holding SP Global or generate 2.32% return on investment over 90 days.

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

FactSet Research Systems  vs.  SP Global

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.

SP Global

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SP Global are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical and fundamental indicators, SP Global is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with FactSet Research and SP Global

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

The idea behind FactSet Research Systems and SP Global 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.