Correlation Between Sherwin Williams and IMCD NV
Can any of the company-specific risk be diversified away by investing in both Sherwin Williams and IMCD NV 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 IMCD NV 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 IMCD NV, you can compare the effects of market volatilities on Sherwin Williams and IMCD NV 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 IMCD NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sherwin Williams and IMCD NV.
Diversification Opportunities for Sherwin Williams and IMCD NV
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sherwin and IMCD is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Sherwin Williams Co and IMCD NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IMCD NV 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 IMCD NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IMCD NV has no effect on the direction of Sherwin Williams i.e., Sherwin Williams and IMCD NV go up and down completely randomly.
Pair Corralation between Sherwin Williams and IMCD NV
Considering the 90-day investment horizon Sherwin Williams Co is expected to generate 1.35 times more return on investment than IMCD NV. However, Sherwin Williams is 1.35 times more volatile than IMCD NV. It trades about -0.07 of its potential returns per unit of risk. IMCD NV is currently generating about -0.15 per unit of risk. If you would invest 38,105 in Sherwin Williams Co on September 19, 2024 and sell it today you would lose (1,796) from holding Sherwin Williams Co or give up 4.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.62% |
| Values | Daily Returns |
Sherwin Williams Co vs. IMCD NV
Performance |
| Timeline |
| Sherwin Williams |
| IMCD NV |
Sherwin Williams and IMCD NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sherwin Williams and IMCD NV
The main advantage of trading using opposite Sherwin Williams and IMCD NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sherwin Williams position performs unexpectedly, IMCD NV 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 IMCD NV will offset losses from the drop in IMCD NV's long position.| Sherwin Williams vs. LyondellBasell Industries NV | Sherwin Williams vs. Cabot | Sherwin Williams vs. Westlake Chemical | Sherwin Williams vs. Air Products and |
| IMCD NV vs. Air Products and | IMCD NV vs. PPG Industries | IMCD NV vs. Sherwin Williams Co | IMCD NV 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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