Correlation Between Sherwin Williams and Quaker Chemical
Can any of the company-specific risk be diversified away by investing in both Sherwin Williams and Quaker Chemical 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 Quaker Chemical 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 Quaker Chemical, you can compare the effects of market volatilities on Sherwin Williams and Quaker Chemical 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 Quaker Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sherwin Williams and Quaker Chemical.
Diversification Opportunities for Sherwin Williams and Quaker Chemical
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sherwin and Quaker is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Sherwin Williams Co and Quaker Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quaker Chemical 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 Quaker Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quaker Chemical has no effect on the direction of Sherwin Williams i.e., Sherwin Williams and Quaker Chemical go up and down completely randomly.
Pair Corralation between Sherwin Williams and Quaker Chemical
Considering the 90-day investment horizon Sherwin Williams is expected to generate 1.4 times less return on investment than Quaker Chemical. But when comparing it to its historical volatility, Sherwin Williams Co is 2.33 times less risky than Quaker Chemical. It trades about 0.18 of its potential returns per unit of risk. Quaker Chemical is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 15,500 in Quaker Chemical on August 24, 2024 and sell it today you would earn a total of 1,145 from holding Quaker Chemical or generate 7.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sherwin Williams Co vs. Quaker Chemical
Performance |
| Timeline |
| Sherwin Williams |
| Quaker Chemical |
Sherwin Williams and Quaker Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sherwin Williams and Quaker Chemical
The main advantage of trading using opposite Sherwin Williams and Quaker Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sherwin Williams position performs unexpectedly, Quaker Chemical 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 Quaker Chemical will offset losses from the drop in Quaker Chemical'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 |
| Quaker Chemical vs. Minerals Technologies | Quaker Chemical vs. Innospec | Quaker Chemical vs. H B Fuller | Quaker Chemical vs. Cabot |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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