Shared ownership is the most tempting edge in financial relationship data. Institutional holdings are filed quarterly, they are structured, and there are millions of them. Two companies held by the same fund are connected — obviously.
Build it that way and the graph stops answering questions.
The arithmetic
An index fund holds three thousand names. If ownership is a path you can walk through, any two of those three thousand are two hops apart, and that one fund contributes four and a half million connections that mean nothing. A few hundred such funds and the answer to what is connected to this company becomes the entire market.
Traversable and terminal
Every edge carries a flag. Traversable means a multi-hop query may walk across it. Terminal means you can land on it but not continue through it. Institutional holdings are terminal.
You can still ask who owns both of two companies. You cannot get from one company to another by way of a fund that happens to hold both. Two hops from Honeywell reaches 1,287 companies — a set you can read — rather than every listed company in the country.
The general point
This is not a data-quality problem. The holdings data is correct, filed and checkable. It is simply not the kind of link you should walk through.
Most of the work in a relationship graph is not extraction. It is deciding, for each kind of link, what a query is allowed to do with it.