Correlation Between FactSet Research and EargoInc

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

Diversification Opportunities for FactSet Research and EargoInc

-0.57

Correlation Coefficient

FactSet Research  EargoInc

Excellent diversification

The 3 months correlation between FactSet and EargoInc is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding FactSet Research Systems and EargoInc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EargoInc 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 EargoInc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EargoInc has no effect on the direction of FactSet Research i.e., FactSet Research and EargoInc go up and down completely randomly.

Pair Corralation between FactSet Research and EargoInc

If you would invest  257.00  in EargoInc on January 26, 2024 and sell it today you would earn a total of  0.00  from holding EargoInc or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	4.76%
Values	Daily Returns

FactSet Research Systems  vs.  EargoInc

FactSet Research Systems

Risk-Adjusted Performance

0 of 100

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.

EargoInc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EargoInc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in May 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with FactSet Research and EargoInc

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

The idea behind FactSet Research Systems and EargoInc 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.