Correlation Between Sherwin Williams and RPM International
Can any of the company-specific risk be diversified away by investing in both Sherwin Williams and RPM International 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 RPM International 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 RPM International, you can compare the effects of market volatilities on Sherwin Williams and RPM International 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 RPM International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sherwin Williams and RPM International.
Diversification Opportunities for Sherwin Williams and RPM International
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Sherwin and RPM is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Sherwin Williams Co and RPM International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RPM International 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 RPM International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RPM International has no effect on the direction of Sherwin Williams i.e., Sherwin Williams and RPM International go up and down completely randomly.
Pair Corralation between Sherwin Williams and RPM International
Considering the 90-day investment horizon Sherwin Williams Co is expected to under-perform the RPM International. In addition to that, Sherwin Williams is 1.25 times more volatile than RPM International. It trades about -0.07 of its total potential returns per unit of risk. RPM International is currently generating about -0.08 per unit of volatility. If you would invest 13,395 in RPM International on November 6, 2024 and sell it today you would lose (735.00) from holding RPM International or give up 5.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sherwin Williams Co vs. RPM International
Performance |
| Timeline |
| Sherwin Williams |
| RPM International |
Sherwin Williams and RPM International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sherwin Williams and RPM International
The main advantage of trading using opposite Sherwin Williams and RPM International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sherwin Williams position performs unexpectedly, RPM International 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 RPM International will offset losses from the drop in RPM International'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 |
| RPM International vs. Innospec | RPM International vs. Minerals Technologies | RPM International vs. Oil Dri | RPM International vs. Quaker Chemical |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |