Correlation Between Sherwin Williams and Orica
Can any of the company-specific risk be diversified away by investing in both Sherwin Williams and Orica 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 Orica 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 Orica Limited, you can compare the effects of market volatilities on Sherwin Williams and Orica 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 Orica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sherwin Williams and Orica.
Diversification Opportunities for Sherwin Williams and Orica
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sherwin and Orica is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Sherwin Williams Co and Orica Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orica Limited 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 Orica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orica Limited has no effect on the direction of Sherwin Williams i.e., Sherwin Williams and Orica go up and down completely randomly.
Pair Corralation between Sherwin Williams and Orica
Considering the 90-day investment horizon Sherwin Williams Co is expected to generate 0.73 times more return on investment than Orica. However, Sherwin Williams Co is 1.37 times less risky than Orica. It trades about 0.07 of its potential returns per unit of risk. Orica Limited is currently generating about 0.05 per unit of risk. If you would invest 25,418 in Sherwin Williams Co on September 3, 2024 and sell it today you would earn a total of 14,140 from holding Sherwin Williams Co or generate 55.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 59.8% |
| Values | Daily Returns |
Sherwin Williams Co vs. Orica Limited
Performance |
| Timeline |
| Sherwin Williams |
| Orica Limited |
Sherwin Williams and Orica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sherwin Williams and Orica
The main advantage of trading using opposite Sherwin Williams and Orica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sherwin Williams position performs unexpectedly, Orica 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 Orica will offset losses from the drop in Orica'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 |
| Orica vs. Sherwin Williams Co | Orica vs. Air Liquide SA | Orica vs. LAir Liquide SA | Orica vs. Air Products and |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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