Correlation Between Sherwin Williams and Orion Engineered
Can any of the company-specific risk be diversified away by investing in both Sherwin Williams and Orion Engineered 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 Orion Engineered 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 Orion Engineered Carbons, you can compare the effects of market volatilities on Sherwin Williams and Orion Engineered 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 Orion Engineered. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sherwin Williams and Orion Engineered.
Diversification Opportunities for Sherwin Williams and Orion Engineered
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sherwin and Orion is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Sherwin Williams Co and Orion Engineered Carbons in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orion Engineered Carbons 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 Orion Engineered. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orion Engineered Carbons has no effect on the direction of Sherwin Williams i.e., Sherwin Williams and Orion Engineered go up and down completely randomly.
Pair Corralation between Sherwin Williams and Orion Engineered
Considering the 90-day investment horizon Sherwin Williams Co is expected to generate 0.61 times more return on investment than Orion Engineered. However, Sherwin Williams Co is 1.63 times less risky than Orion Engineered. It trades about 0.24 of its potential returns per unit of risk. Orion Engineered Carbons is currently generating about -0.29 per unit of risk. If you would invest 33,782 in Sherwin Williams Co on November 6, 2024 and sell it today you would earn a total of 2,034 from holding Sherwin Williams Co or generate 6.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sherwin Williams Co vs. Orion Engineered Carbons
Performance |
| Timeline |
| Sherwin Williams |
| Orion Engineered Carbons |
Sherwin Williams and Orion Engineered Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sherwin Williams and Orion Engineered
The main advantage of trading using opposite Sherwin Williams and Orion Engineered positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sherwin Williams position performs unexpectedly, Orion Engineered 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 Orion Engineered will offset losses from the drop in Orion Engineered'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 |
| Orion Engineered vs. Innospec | Orion Engineered vs. H B Fuller | Orion Engineered vs. Quaker Chemical | Orion Engineered vs. Minerals Technologies |
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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