Correlation Between FactSet Research and AAON

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

Diversification Opportunities for FactSet Research and AAON

0.6
  Correlation Coefficient

Poor diversification

The 3 months correlation between FactSet and AAON is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding FactSet Research Systems and AAON Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AAON Inc 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 AAON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AAON Inc has no effect on the direction of FactSet Research i.e., FactSet Research and AAON go up and down completely randomly.

Pair Corralation between FactSet Research and AAON

Considering the 90-day investment horizon FactSet Research is expected to generate 1.87 times less return on investment than AAON. But when comparing it to its historical volatility, FactSet Research Systems is 1.98 times less risky than AAON. It trades about 0.25 of its potential returns per unit of risk. AAON Inc is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  6,535  in AAON Inc on September 8, 2022 and sell it today you would earn a total of  1,208  from holding AAON Inc or generate 18.49% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

FactSet Research Systems  vs.  AAON Inc

 Performance (%) 
       Timeline  
FactSet Research Systems 
FactSet Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in FactSet Research Systems are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable fundamental indicators, FactSet Research is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

FactSet Price Channel

AAON Inc 
AAON Performance
14 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in AAON Inc are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, AAON disclosed solid returns over the last few months and may actually be approaching a breakup point.

AAON Price Channel

FactSet Research and AAON Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with FactSet Research and AAON

The main advantage of trading using opposite FactSet Research and AAON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FactSet Research position performs unexpectedly, AAON 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 AAON will offset losses from the drop in AAON's long position.
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The idea behind FactSet Research Systems and AAON Inc 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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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.

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