Correlation Between Sherwin Williams and Perimeter Solutions
Can any of the company-specific risk be diversified away by investing in both Sherwin Williams and Perimeter Solutions 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 Perimeter Solutions 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 Perimeter Solutions SA, you can compare the effects of market volatilities on Sherwin Williams and Perimeter Solutions 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 Perimeter Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sherwin Williams and Perimeter Solutions.
Diversification Opportunities for Sherwin Williams and Perimeter Solutions
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sherwin and Perimeter is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Sherwin Williams Co and Perimeter Solutions SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perimeter Solutions 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 Perimeter Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perimeter Solutions has no effect on the direction of Sherwin Williams i.e., Sherwin Williams and Perimeter Solutions go up and down completely randomly.
Pair Corralation between Sherwin Williams and Perimeter Solutions
Considering the 90-day investment horizon Sherwin Williams is expected to generate 1.17 times less return on investment than Perimeter Solutions. But when comparing it to its historical volatility, Sherwin Williams Co is 2.07 times less risky than Perimeter Solutions. It trades about 0.07 of its potential returns per unit of risk. Perimeter Solutions SA is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 878.00 in Perimeter Solutions SA on September 2, 2024 and sell it today you would earn a total of 402.00 from holding Perimeter Solutions SA or generate 45.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sherwin Williams Co vs. Perimeter Solutions SA
Performance |
| Timeline |
| Sherwin Williams |
| Perimeter Solutions |
Sherwin Williams and Perimeter Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sherwin Williams and Perimeter Solutions
The main advantage of trading using opposite Sherwin Williams and Perimeter Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sherwin Williams position performs unexpectedly, Perimeter Solutions 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 Perimeter Solutions will offset losses from the drop in Perimeter Solutions' long position.| Sherwin Williams vs. Air Products and | Sherwin Williams vs. Linde plc Ordinary | Sherwin Williams vs. Ecolab Inc | Sherwin Williams vs. RPM International |
| Perimeter Solutions vs. Kronos Worldwide | Perimeter Solutions vs. Sensient Technologies | Perimeter Solutions vs. Element Solutions | Perimeter Solutions vs. Trinseo SA |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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