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
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sherwin and Arkema is 0.49. 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
If you would invest 35,686 in Sherwin Williams Co on December 5, 2024 and sell it today you would lose (13.00) from holding Sherwin Williams Co or give up 0.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| 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 | ||
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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 the Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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