Correlation Between SILVER BULLET and Willis Towers

Can any of the company-specific risk be diversified away by investing in both SILVER BULLET 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 SILVER BULLET and Willis Towers into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SILVER BULLET DATA and Willis Towers Watson, you can compare the effects of market volatilities on SILVER BULLET 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 SILVER BULLET with a short position of Willis Towers. Check out your portfolio center. Please also check ongoing floating volatility patterns of SILVER BULLET and Willis Towers.

Diversification Opportunities for SILVER BULLET and Willis Towers

-0.18

Correlation Coefficient

SILVER BULLET  Willis Towers

Good diversification

The 3 months correlation between SILVER and Willis is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding SILVER BULLET DATA 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 SILVER BULLET 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 SILVER BULLET DATA 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 SILVER BULLET i.e., SILVER BULLET and Willis Towers go up and down completely randomly.

Pair Corralation between SILVER BULLET and Willis Towers

Assuming the 90 days horizon SILVER BULLET DATA is expected to under-perform the Willis Towers. In addition to that, SILVER BULLET is 1.63 times more volatile than Willis Towers Watson. It trades about -0.28 of its total potential returns per unit of risk. Willis Towers Watson is currently generating about 0.01 per unit of volatility. If you would invest  29,514  in Willis Towers Watson on December 19, 2024 and sell it today you would earn a total of  86.00  from holding Willis Towers Watson or generate 0.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

SILVER BULLET DATA  vs.  Willis Towers Watson

SILVER BULLET DATA

Risk-Adjusted Performance

Very Weak

Over the last 90 days SILVER BULLET DATA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Willis Towers Watson

Risk-Adjusted Performance

Very Weak

Over the last 90 days Willis Towers Watson has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Willis Towers is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with SILVER BULLET and Willis Towers

The main advantage of trading using opposite SILVER BULLET and Willis Towers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SILVER BULLET 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.

The idea behind SILVER BULLET DATA and Willis Towers Watson pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.