Correlation Between Global Ship and Sherwin Williams
Can any of the company-specific risk be diversified away by investing in both Global Ship and Sherwin Williams 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 Global Ship and Sherwin Williams into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Ship Lease and The Sherwin Williams, you can compare the effects of market volatilities on Global Ship and Sherwin Williams 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 Global Ship with a short position of Sherwin Williams. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Ship and Sherwin Williams.
Diversification Opportunities for Global Ship and Sherwin Williams
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Global and Sherwin is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Global Ship Lease and The Sherwin Williams in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sherwin Williams and Global Ship 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 Global Ship Lease are associated (or correlated) with Sherwin Williams. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sherwin Williams has no effect on the direction of Global Ship i.e., Global Ship and Sherwin Williams go up and down completely randomly.
Pair Corralation between Global Ship and Sherwin Williams
Assuming the 90 days horizon Global Ship is expected to generate 1.1 times less return on investment than Sherwin Williams. In addition to that, Global Ship is 1.1 times more volatile than The Sherwin Williams. It trades about 0.05 of its total potential returns per unit of risk. The Sherwin Williams is currently generating about 0.07 per unit of volatility. If you would invest 22,146 in The Sherwin Williams on September 12, 2024 and sell it today you would earn a total of 13,544 from holding The Sherwin Williams or generate 61.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Ship Lease vs. The Sherwin Williams
Performance |
| Timeline |
| Global Ship Lease |
| Sherwin Williams |
Global Ship and Sherwin Williams Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Ship and Sherwin Williams
The main advantage of trading using opposite Global Ship and Sherwin Williams positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Ship position performs unexpectedly, Sherwin Williams 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 Sherwin Williams will offset losses from the drop in Sherwin Williams' long position.| Global Ship vs. Superior Plus Corp | Global Ship vs. SIVERS SEMICONDUCTORS AB | Global Ship vs. CHINA HUARONG ENERHD 50 | Global Ship vs. NORDIC HALIBUT AS |
| Sherwin Williams vs. ULTRA CLEAN HLDGS | Sherwin Williams vs. Natural Health Trends | Sherwin Williams vs. Global Ship Lease | Sherwin Williams vs. Bausch Health Companies |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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