Correlation Between Quaker Chemical and Sherwin Williams
Can any of the company-specific risk be diversified away by investing in both Quaker Chemical 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 Quaker Chemical and Sherwin Williams into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quaker Chemical and Sherwin Williams Co, you can compare the effects of market volatilities on Quaker Chemical 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 Quaker Chemical with a short position of Sherwin Williams. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quaker Chemical and Sherwin Williams.
Diversification Opportunities for Quaker Chemical and Sherwin Williams
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Quaker and Sherwin is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Quaker Chemical and Sherwin Williams Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sherwin Williams and Quaker Chemical 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 Quaker Chemical 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 Quaker Chemical i.e., Quaker Chemical and Sherwin Williams go up and down completely randomly.
Pair Corralation between Quaker Chemical and Sherwin Williams
Considering the 90-day investment horizon Quaker Chemical is expected to generate 2.33 times more return on investment than Sherwin Williams. However, Quaker Chemical is 2.33 times more volatile than Sherwin Williams Co. It trades about 0.11 of its potential returns per unit of risk. Sherwin Williams Co is currently generating about 0.18 per unit of risk. If you would invest 15,500 in Quaker Chemical on August 24, 2024 and sell it today you would earn a total of 1,145 from holding Quaker Chemical or generate 7.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Quaker Chemical vs. Sherwin Williams Co
Performance |
| Timeline |
| Quaker Chemical |
| Sherwin Williams |
Quaker Chemical and Sherwin Williams Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quaker Chemical and Sherwin Williams
The main advantage of trading using opposite Quaker Chemical and Sherwin Williams positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quaker Chemical 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.| Quaker Chemical vs. Minerals Technologies | Quaker Chemical vs. Innospec | Quaker Chemical vs. H B Fuller | Quaker Chemical vs. Cabot |
| Sherwin Williams vs. Air Products and | Sherwin Williams vs. Linde plc Ordinary | Sherwin Williams vs. Ecolab Inc | Sherwin Williams vs. RPM International |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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