Correlation Between FactSet Research and Aerojet Rocketdyne

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both FactSet Research and Aerojet Rocketdyne 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 Aerojet Rocketdyne 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 Aerojet Rocketdyne Holdings, you can compare the effects of market volatilities on FactSet Research and Aerojet Rocketdyne 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 Aerojet Rocketdyne. Check out your portfolio center. Please also check ongoing floating volatility patterns of FactSet Research and Aerojet Rocketdyne.

Diversification Opportunities for FactSet Research and Aerojet Rocketdyne

0.68
  Correlation Coefficient

Poor diversification

The 3 months correlation between FactSet and Aerojet is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding FactSet Research Systems and Aerojet Rocketdyne Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aerojet Rocketdyne 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 Aerojet Rocketdyne. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aerojet Rocketdyne has no effect on the direction of FactSet Research i.e., FactSet Research and Aerojet Rocketdyne go up and down completely randomly.

Pair Corralation between FactSet Research and Aerojet Rocketdyne

Considering the 90-day investment horizon FactSet Research is expected to generate 1.11 times less return on investment than Aerojet Rocketdyne. In addition to that, FactSet Research is 1.06 times more volatile than Aerojet Rocketdyne Holdings. It trades about 0.2 of its total potential returns per unit of risk. Aerojet Rocketdyne Holdings is currently generating about 0.23 per unit of volatility. If you would invest  4,958  in Aerojet Rocketdyne Holdings on September 10, 2022 and sell it today you would earn a total of  431.00  from holding Aerojet Rocketdyne Holdings or generate 8.69% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

FactSet Research Systems  vs.  Aerojet Rocketdyne Holdings

 Performance (%) 
       Timeline  
FactSet Research Systems 
FactSet Performance
0 of 100
Over the last 90 days FactSet Research Systems has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental indicators, FactSet Research is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

FactSet Price Channel

Aerojet Rocketdyne 
Aerojet Performance
12 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Aerojet Rocketdyne Holdings are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Aerojet Rocketdyne exhibited solid returns over the last few months and may actually be approaching a breakup point.

Aerojet Price Channel

FactSet Research and Aerojet Rocketdyne Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with FactSet Research and Aerojet Rocketdyne

The main advantage of trading using opposite FactSet Research and Aerojet Rocketdyne positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FactSet Research position performs unexpectedly, Aerojet Rocketdyne 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 Aerojet Rocketdyne will offset losses from the drop in Aerojet Rocketdyne's long position.
FactSet Research vs. Mineral Resources Limited
FactSet Research vs. Rio Tinto Group
FactSet Research vs. Anglo American PLC
FactSet Research vs. Mineral Res
The idea behind FactSet Research Systems and Aerojet Rocketdyne 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.
Aerojet Rocketdyne vs. Coca-Cola Bottling Co
Aerojet Rocketdyne vs. Coca-Cola European Partners
Aerojet Rocketdyne vs. PepsiCo
Aerojet Rocketdyne vs. Uni-President China Holdings
Check out your portfolio center. 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.

Other Complementary Tools

Price Exposure Probability
Analyze equity upside and downside potential for a given time horizon across multiple markets
Go
Portfolio File Import
Quickly import all of your third-party portfolios from your local drive in csv format
Go
Analyst Recommendations
Analyst recommendations and target price estimates broken down by several categories
Go
Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios
Go
Equity Valuation
Check real value of public entities based on technical and fundamental data
Go
Portfolio Comparator
Compare the composition, asset allocations and performance of any two portfolios in your account
Go
Portfolio Anywhere
Track or share privately all of your investments from the convenience of any device
Go
Focused Opportunities
Build portfolios using our predefined set of ideas and optimize them against your investing preferences
Go