Correlation Between Willis Towers and DATAGROUP
Can any of the company-specific risk be diversified away by investing in both Willis Towers and DATAGROUP 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 DATAGROUP 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 DATAGROUP SE, you can compare the effects of market volatilities on Willis Towers and DATAGROUP 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 DATAGROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Willis Towers and DATAGROUP.
Diversification Opportunities for Willis Towers and DATAGROUP
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Willis and DATAGROUP is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Willis Towers Watson and DATAGROUP SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DATAGROUP SE 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 DATAGROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DATAGROUP SE has no effect on the direction of Willis Towers i.e., Willis Towers and DATAGROUP go up and down completely randomly.
Pair Corralation between Willis Towers and DATAGROUP
Assuming the 90 days horizon Willis Towers Watson is expected to generate 0.39 times more return on investment than DATAGROUP. However, Willis Towers Watson is 2.57 times less risky than DATAGROUP. It trades about 0.23 of its potential returns per unit of risk. DATAGROUP SE is currently generating about -0.08 per unit of risk. If you would invest 29,314 in Willis Towers Watson on October 13, 2024 and sell it today you would earn a total of 1,086 from holding Willis Towers Watson or generate 3.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Willis Towers Watson vs. DATAGROUP SE
Performance |
| Timeline |
| Willis Towers Watson |
| DATAGROUP SE |
Willis Towers and DATAGROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Willis Towers and DATAGROUP
The main advantage of trading using opposite Willis Towers and DATAGROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Willis Towers position performs unexpectedly, DATAGROUP 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 DATAGROUP will offset losses from the drop in DATAGROUP's long position.| Willis Towers vs. DATAGROUP SE | Willis Towers vs. Information Services International Dentsu | Willis Towers vs. Scandinavian Tobacco Group | Willis Towers vs. Jacquet Metal Service |
| DATAGROUP vs. Linedata Services SA | DATAGROUP vs. Sch Environnement SA | DATAGROUP vs. CALTAGIRONE EDITORE | DATAGROUP vs. STEEL DYNAMICS |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |