Correlation Between Sherwin Williams and G6 Materials
Can any of the company-specific risk be diversified away by investing in both Sherwin Williams and G6 Materials 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 G6 Materials 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 G6 Materials Corp, you can compare the effects of market volatilities on Sherwin Williams and G6 Materials 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 G6 Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sherwin Williams and G6 Materials.
Diversification Opportunities for Sherwin Williams and G6 Materials
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sherwin and GPHBF is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Sherwin Williams Co and G6 Materials Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G6 Materials Corp 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 G6 Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G6 Materials Corp has no effect on the direction of Sherwin Williams i.e., Sherwin Williams and G6 Materials go up and down completely randomly.
Pair Corralation between Sherwin Williams and G6 Materials
Considering the 90-day investment horizon Sherwin Williams Co is expected to generate 0.15 times more return on investment than G6 Materials. However, Sherwin Williams Co is 6.54 times less risky than G6 Materials. It trades about 0.32 of its potential returns per unit of risk. G6 Materials Corp is currently generating about -0.01 per unit of risk. If you would invest 35,811 in Sherwin Williams Co on September 1, 2024 and sell it today you would earn a total of 3,929 from holding Sherwin Williams Co or generate 10.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sherwin Williams Co vs. G6 Materials Corp
Performance |
| Timeline |
| Sherwin Williams |
| G6 Materials Corp |
Sherwin Williams and G6 Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sherwin Williams and G6 Materials
The main advantage of trading using opposite Sherwin Williams and G6 Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sherwin Williams position performs unexpectedly, G6 Materials 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 G6 Materials will offset losses from the drop in G6 Materials' long position.| Sherwin Williams vs. Linde plc Ordinary | Sherwin Williams vs. Air Products and | Sherwin Williams vs. Aquagold International | Sherwin Williams vs. Thrivent High Yield |
| G6 Materials vs. Sherwin Williams Co | G6 Materials vs. Air Liquide SA | G6 Materials vs. Air Products and | G6 Materials vs. Ecolab 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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