Correlation Between Addtech AB and Willis Towers
Can any of the company-specific risk be diversified away by investing in both Addtech AB and Willis Towers 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 Addtech AB and Willis Towers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Addtech AB and Willis Towers Watson, you can compare the effects of market volatilities on Addtech AB and Willis Towers 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 Addtech AB with a short position of Willis Towers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addtech AB and Willis Towers.
Diversification Opportunities for Addtech AB and Willis Towers
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Addtech and Willis is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Addtech AB and Willis Towers Watson in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Willis Towers Watson and Addtech AB 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 Addtech AB are associated (or correlated) with Willis Towers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Willis Towers Watson has no effect on the direction of Addtech AB i.e., Addtech AB and Willis Towers go up and down completely randomly.
Pair Corralation between Addtech AB and Willis Towers
Assuming the 90 days trading horizon Addtech AB is expected to generate 1.23 times less return on investment than Willis Towers. In addition to that, Addtech AB is 1.29 times more volatile than Willis Towers Watson. It trades about 0.12 of its total potential returns per unit of risk. Willis Towers Watson is currently generating about 0.2 per unit of volatility. If you would invest 29,800 in Willis Towers Watson on November 6, 2024 and sell it today you would earn a total of 1,800 from holding Willis Towers Watson or generate 6.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Addtech AB vs. Willis Towers Watson
Performance |
| Timeline |
| Addtech AB |
| Willis Towers Watson |
Addtech AB and Willis Towers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Addtech AB and Willis Towers
The main advantage of trading using opposite Addtech AB and Willis Towers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Addtech AB position performs unexpectedly, Willis Towers 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 Willis Towers will offset losses from the drop in Willis Towers' long position.| Addtech AB vs. SAFEROADS HLDGS | Addtech AB vs. Television Broadcasts Limited | Addtech AB vs. CarsalesCom | Addtech AB vs. MARKET VECTR RETAIL |
| Willis Towers vs. PATTIES FOODS | Willis Towers vs. INDOFOOD AGRI RES | Willis Towers vs. Yanzhou Coal Mining | Willis Towers vs. Aya Gold Silver |
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 the Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |