Correlation Between Willis Towers and Sabre Insurance
Can any of the company-specific risk be diversified away by investing in both Willis Towers and Sabre Insurance 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 Willis Towers and Sabre Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Willis Towers Watson and Sabre Insurance Group, you can compare the effects of market volatilities on Willis Towers and Sabre Insurance 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 Willis Towers with a short position of Sabre Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Willis Towers and Sabre Insurance.
Diversification Opportunities for Willis Towers and Sabre Insurance
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Willis and Sabre is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Willis Towers Watson and Sabre Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sabre Insurance Group and Willis Towers 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 Willis Towers Watson are associated (or correlated) with Sabre Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sabre Insurance Group has no effect on the direction of Willis Towers i.e., Willis Towers and Sabre Insurance go up and down completely randomly.
Pair Corralation between Willis Towers and Sabre Insurance
Considering the 90-day investment horizon Willis Towers Watson is expected to generate 3.91 times more return on investment than Sabre Insurance. However, Willis Towers is 3.91 times more volatile than Sabre Insurance Group. It trades about 0.12 of its potential returns per unit of risk. Sabre Insurance Group is currently generating about 0.08 per unit of risk. If you would invest 23,957 in Willis Towers Watson on September 2, 2024 and sell it today you would earn a total of 8,243 from holding Willis Towers Watson or generate 34.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Willis Towers Watson vs. Sabre Insurance Group
Performance |
| Timeline |
| Willis Towers Watson |
| Sabre Insurance Group |
Willis Towers and Sabre Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Willis Towers and Sabre Insurance
The main advantage of trading using opposite Willis Towers and Sabre Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Willis Towers position performs unexpectedly, Sabre Insurance 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 Sabre Insurance will offset losses from the drop in Sabre Insurance's long position.| Willis Towers vs. Marsh McLennan Companies | Willis Towers vs. Arthur J Gallagher | Willis Towers vs. Brown Brown | Willis Towers vs. Erie Indemnity |
| Sabre Insurance vs. Jutal Offshore Oil | Sabre Insurance vs. Anheuser Busch Inbev | Sabre Insurance vs. National Beverage Corp | Sabre Insurance vs. Lifevantage |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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