Correlation Between Sherwin Williams and Green Star
Can any of the company-specific risk be diversified away by investing in both Sherwin Williams and Green Star 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 Green Star 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 Green Star Products, you can compare the effects of market volatilities on Sherwin Williams and Green Star 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 Green Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sherwin Williams and Green Star.
Diversification Opportunities for Sherwin Williams and Green Star
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sherwin and Green is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Sherwin Williams Co and Green Star Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Star Products 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 Green Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Star Products has no effect on the direction of Sherwin Williams i.e., Sherwin Williams and Green Star go up and down completely randomly.
Pair Corralation between Sherwin Williams and Green Star
Considering the 90-day investment horizon Sherwin Williams is expected to generate 3.8 times less return on investment than Green Star. But when comparing it to its historical volatility, Sherwin Williams Co is 9.87 times less risky than Green Star. It trades about 0.16 of its potential returns per unit of risk. Green Star Products is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 0.13 in Green Star Products on September 1, 2024 and sell it today you would lose (0.02) from holding Green Star Products or give up 15.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sherwin Williams Co vs. Green Star Products
Performance |
| Timeline |
| Sherwin Williams |
| Green Star Products |
Sherwin Williams and Green Star Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sherwin Williams and Green Star
The main advantage of trading using opposite Sherwin Williams and Green Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sherwin Williams position performs unexpectedly, Green Star 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 Green Star will offset losses from the drop in Green Star's 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 |
| Green Star vs. Sherwin Williams Co | Green Star vs. Air Liquide SA | Green Star vs. Air Products and | Green Star 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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