Correlation Between Information Services and Willis Towers
Can any of the company-specific risk be diversified away by investing in both Information Services 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 Information Services and Willis Towers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Information Services International Dentsu and Willis Towers Watson, you can compare the effects of market volatilities on Information Services 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 Information Services with a short position of Willis Towers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Information Services and Willis Towers.
Diversification Opportunities for Information Services and Willis Towers
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Information and Willis is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Information Services Internati 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 Information Services 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 Information Services International Dentsu 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 Information Services i.e., Information Services and Willis Towers go up and down completely randomly.
Pair Corralation between Information Services and Willis Towers
Assuming the 90 days horizon Information Services is expected to generate 2.28 times less return on investment than Willis Towers. In addition to that, Information Services is 1.56 times more volatile than Willis Towers Watson. It trades about 0.04 of its total potential returns per unit of risk. Willis Towers Watson is currently generating about 0.15 per unit of volatility. If you would invest 23,367 in Willis Towers Watson on October 13, 2024 and sell it today you would earn a total of 7,033 from holding Willis Towers Watson or generate 30.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Information Services Internati vs. Willis Towers Watson
Performance |
| Timeline |
| Information Services |
| Willis Towers Watson |
Information Services and Willis Towers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Information Services and Willis Towers
The main advantage of trading using opposite Information Services and Willis Towers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Information Services 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.| Information Services vs. PARKEN Sport Entertainment | Information Services vs. Fuji Media Holdings | Information Services vs. Fair Isaac Corp | Information Services vs. CHINA SOUTHN AIR H |
| Willis Towers vs. DATAGROUP SE | Willis Towers vs. Information Services International Dentsu | Willis Towers vs. Scandinavian Tobacco Group | Willis Towers vs. Jacquet Metal Service |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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