Correlation Between Sherwin Williams and Israel
Can any of the company-specific risk be diversified away by investing in both Sherwin Williams and Israel 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 Israel 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 Israel, you can compare the effects of market volatilities on Sherwin Williams and Israel 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 Israel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sherwin Williams and Israel.
Diversification Opportunities for Sherwin Williams and Israel
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sherwin and Israel is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Sherwin Williams Co and Israel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Israel 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 Israel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Israel has no effect on the direction of Sherwin Williams i.e., Sherwin Williams and Israel go up and down completely randomly.
Pair Corralation between Sherwin Williams and Israel
Considering the 90-day investment horizon Sherwin Williams is expected to generate 9.87 times less return on investment than Israel. But when comparing it to its historical volatility, Sherwin Williams Co is 5.68 times less risky than Israel. It trades about 0.02 of its potential returns per unit of risk. Israel is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 26,213 in Israel on December 5, 2024 and sell it today you would earn a total of 2,287 from holding Israel or generate 8.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 93.5% |
| Values | Daily Returns |
Sherwin Williams Co vs. Israel
Performance |
| Timeline |
| Sherwin Williams |
| Israel |
Sherwin Williams and Israel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sherwin Williams and Israel
The main advantage of trading using opposite Sherwin Williams and Israel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sherwin Williams position performs unexpectedly, Israel 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 Israel will offset losses from the drop in Israel'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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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