Correlation Between FactSet Research and Dun Bradstreet

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

Diversification Opportunities for FactSet Research and Dun Bradstreet

-0.44

Correlation Coefficient

FactSet Research  Dun Bradstreet

Very good diversification

The 3 months correlation between FactSet and Dun is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding FactSet Research Systems and Dun Bradstreet Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dun Bradstreet Holdings 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 Dun Bradstreet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dun Bradstreet Holdings has no effect on the direction of FactSet Research i.e., FactSet Research and Dun Bradstreet go up and down completely randomly.

Pair Corralation between FactSet Research and Dun Bradstreet

Considering the 90-day investment horizon FactSet Research is expected to generate 2.57 times less return on investment than Dun Bradstreet. But when comparing it to its historical volatility, FactSet Research Systems is 2.56 times less risky than Dun Bradstreet. It trades about 0.17 of its potential returns per unit of risk. Dun Bradstreet Holdings is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  1,136  in Dun Bradstreet Holdings on August 13, 2024 and sell it today you would earn a total of  97.00  from holding Dun Bradstreet Holdings or generate 8.54% return on investment over 90 days.

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

FactSet Research Systems  vs.  Dun Bradstreet Holdings

FactSet Research Systems

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in FactSet Research Systems are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady fundamental indicators, FactSet Research unveiled solid returns over the last few months and may actually be approaching a breakup point.

Dun Bradstreet Holdings

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Dun Bradstreet Holdings are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Dun Bradstreet is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with FactSet Research and Dun Bradstreet

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

The idea behind FactSet Research Systems and Dun Bradstreet Holdings 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.