Correlation Between Sherwin Williams and Sincerity Applied
Can any of the company-specific risk be diversified away by investing in both Sherwin Williams and Sincerity Applied 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 Sincerity Applied 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 Sincerity Applied Materials, you can compare the effects of market volatilities on Sherwin Williams and Sincerity Applied 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 Sincerity Applied. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sherwin Williams and Sincerity Applied.
Diversification Opportunities for Sherwin Williams and Sincerity Applied
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sherwin and Sincerity is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Sherwin Williams Co and Sincerity Applied Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sincerity Applied 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 Sincerity Applied. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sincerity Applied has no effect on the direction of Sherwin Williams i.e., Sherwin Williams and Sincerity Applied go up and down completely randomly.
Pair Corralation between Sherwin Williams and Sincerity Applied
Considering the 90-day investment horizon Sherwin Williams is expected to generate 66.57 times less return on investment than Sincerity Applied. But when comparing it to its historical volatility, Sherwin Williams Co is 40.84 times less risky than Sincerity Applied. It trades about 0.07 of its potential returns per unit of risk. Sincerity Applied Materials is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 0.51 in Sincerity Applied Materials on September 3, 2024 and sell it today you would lose (0.39) from holding Sincerity Applied Materials or give up 76.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sherwin Williams Co vs. Sincerity Applied Materials
Performance |
| Timeline |
| Sherwin Williams |
| Sincerity Applied |
Sherwin Williams and Sincerity Applied Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sherwin Williams and Sincerity Applied
The main advantage of trading using opposite Sherwin Williams and Sincerity Applied positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sherwin Williams position performs unexpectedly, Sincerity Applied 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 Sincerity Applied will offset losses from the drop in Sincerity Applied'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 |
| Sincerity Applied vs. Crown Electrokinetics Corp | Sincerity Applied vs. General Environmental Management | Sincerity Applied vs. Core Molding Technologies | Sincerity Applied vs. Balchem |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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