Correlation Between Sherwin Williams and Arkema SA
Can any of the company-specific risk be diversified away by investing in both Sherwin Williams and Arkema SA 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 Sherwin Williams and Arkema SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sherwin Williams Co and Arkema SA, you can compare the effects of market volatilities on Sherwin Williams and Arkema SA 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 Sherwin Williams with a short position of Arkema SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sherwin Williams and Arkema SA.
Diversification Opportunities for Sherwin Williams and Arkema SA
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sherwin and Arkema is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Sherwin Williams Co and Arkema SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arkema SA and Sherwin Williams 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 Sherwin Williams Co are associated (or correlated) with Arkema SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arkema SA has no effect on the direction of Sherwin Williams i.e., Sherwin Williams and Arkema SA go up and down completely randomly.
Pair Corralation between Sherwin Williams and Arkema SA
Considering the 90-day investment horizon Sherwin Williams Co is expected to generate 0.84 times more return on investment than Arkema SA. However, Sherwin Williams Co is 1.19 times less risky than Arkema SA. It trades about 0.11 of its potential returns per unit of risk. Arkema SA is currently generating about -0.01 per unit of risk. If you would invest 24,014 in Sherwin Williams Co on August 31, 2024 and sell it today you would earn a total of 15,726 from holding Sherwin Williams Co or generate 65.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 51.6% |
| Values | Daily Returns |
Sherwin Williams Co vs. Arkema SA
Performance |
| Timeline |
| Sherwin Williams |
| Arkema SA |
Sherwin Williams and Arkema SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sherwin Williams and Arkema SA
The main advantage of trading using opposite Sherwin Williams and Arkema SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sherwin Williams position performs unexpectedly, Arkema SA 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 Arkema SA will offset losses from the drop in Arkema SA's long position.| Sherwin Williams vs. Air Products and | Sherwin Williams vs. Linde plc Ordinary | Sherwin Williams vs. Ecolab Inc | Sherwin Williams vs. RPM International |
| Arkema SA vs. Vita Coco | Arkema SA vs. China Tontine Wines | Arkema SA vs. Highway Holdings Limited | Arkema SA vs. SNDL Inc |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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