Correlation Between Qualys and Willis Towers

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Can any of the company-specific risk be diversified away by investing in both Qualys 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 Qualys and Willis Towers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Qualys Inc and Willis Towers Watson, you can compare the effects of market volatilities on Qualys 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 Qualys with a short position of Willis Towers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qualys and Willis Towers.

Diversification Opportunities for Qualys and Willis Towers

-0.66
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Qualys and Willis is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Qualys Inc 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 Qualys 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 Qualys Inc 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 Qualys i.e., Qualys and Willis Towers go up and down completely randomly.

Pair Corralation between Qualys and Willis Towers

Given the investment horizon of 90 days Qualys Inc is expected to generate 1.88 times more return on investment than Willis Towers. However, Qualys is 1.88 times more volatile than Willis Towers Watson. It trades about 0.02 of its potential returns per unit of risk. Willis Towers Watson is currently generating about 0.03 per unit of risk. If you would invest  10,495  in Qualys Inc on September 8, 2022 and sell it today you would earn a total of  1,045  from holding Qualys Inc or generate 9.96% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Qualys Inc  vs.  Willis Towers Watson

 Performance (%) 
       Timeline  
Qualys Inc 
Qualys Performance
0 of 100
Over the last 90 days Qualys Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with conflicting performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2023. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Qualys Price Channel

Willis Towers Watson 
Willis Performance
11 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Willis Towers Watson are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Willis Towers showed solid returns over the last few months and may actually be approaching a breakup point.

Willis Price Channel

Qualys and Willis Towers Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Qualys and Willis Towers

The main advantage of trading using opposite Qualys and Willis Towers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qualys 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.
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The idea behind Qualys Inc 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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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 Global Correlations module to find global opportunities by holding instruments from different markets.

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