Correlation Between Sherwin Williams and Essentra Plc
Can any of the company-specific risk be diversified away by investing in both Sherwin Williams and Essentra Plc 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 Essentra Plc 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 Essentra Plc, you can compare the effects of market volatilities on Sherwin Williams and Essentra Plc 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 Essentra Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sherwin Williams and Essentra Plc.
Diversification Opportunities for Sherwin Williams and Essentra Plc
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sherwin and Essentra is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Sherwin Williams Co and Essentra Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Essentra Plc 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 Essentra Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Essentra Plc has no effect on the direction of Sherwin Williams i.e., Sherwin Williams and Essentra Plc go up and down completely randomly.
Pair Corralation between Sherwin Williams and Essentra Plc
Considering the 90-day investment horizon Sherwin Williams Co is expected to generate 0.47 times more return on investment than Essentra Plc. However, Sherwin Williams Co is 2.14 times less risky than Essentra Plc. It trades about 0.11 of its potential returns per unit of risk. Essentra Plc is currently generating about 0.0 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 | Insignificant |
| Accuracy | 42.25% |
| Values | Daily Returns |
Sherwin Williams Co vs. Essentra Plc
Performance |
| Timeline |
| Sherwin Williams |
| Essentra Plc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Sherwin Williams and Essentra Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sherwin Williams and Essentra Plc
The main advantage of trading using opposite Sherwin Williams and Essentra Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sherwin Williams position performs unexpectedly, Essentra Plc 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 Essentra Plc will offset losses from the drop in Essentra Plc'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 |
| Essentra Plc vs. LyondellBasell Industries NV | Essentra Plc vs. International Flavors Fragrances | Essentra Plc vs. Cabot | Essentra Plc vs. Westlake Chemical |
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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