Correlation Between LANXESS Aktiengesellscha and Sherwin Williams
Can any of the company-specific risk be diversified away by investing in both LANXESS Aktiengesellscha 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 LANXESS Aktiengesellscha and Sherwin Williams into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LANXESS Aktiengesellschaft and The Sherwin Williams, you can compare the effects of market volatilities on LANXESS Aktiengesellscha 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 LANXESS Aktiengesellscha with a short position of Sherwin Williams. Check out your portfolio center. Please also check ongoing floating volatility patterns of LANXESS Aktiengesellscha and Sherwin Williams.
Diversification Opportunities for LANXESS Aktiengesellscha and Sherwin Williams
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LANXESS and Sherwin is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding LANXESS Aktiengesellschaft and The Sherwin Williams in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sherwin Williams and LANXESS Aktiengesellscha 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 LANXESS Aktiengesellschaft 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 LANXESS Aktiengesellscha i.e., LANXESS Aktiengesellscha and Sherwin Williams go up and down completely randomly.
Pair Corralation between LANXESS Aktiengesellscha and Sherwin Williams
Assuming the 90 days horizon LANXESS Aktiengesellschaft is expected to generate 1.55 times more return on investment than Sherwin Williams. However, LANXESS Aktiengesellscha is 1.55 times more volatile than The Sherwin Williams. It trades about 0.19 of its potential returns per unit of risk. The Sherwin Williams is currently generating about -0.07 per unit of risk. If you would invest 2,369 in LANXESS Aktiengesellschaft on September 12, 2024 and sell it today you would earn a total of 279.00 from holding LANXESS Aktiengesellschaft or generate 11.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
LANXESS Aktiengesellschaft vs. The Sherwin Williams
Performance |
| Timeline |
| LANXESS Aktiengesellscha |
| Sherwin Williams |
LANXESS Aktiengesellscha and Sherwin Williams Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LANXESS Aktiengesellscha and Sherwin Williams
The main advantage of trading using opposite LANXESS Aktiengesellscha and Sherwin Williams positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LANXESS Aktiengesellscha 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.| LANXESS Aktiengesellscha vs. PRECISION DRILLING P | LANXESS Aktiengesellscha vs. Chuangs China Investments | LANXESS Aktiengesellscha vs. EAT WELL INVESTMENT | LANXESS Aktiengesellscha vs. BORR DRILLING NEW |
| 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |