Correlation Between Sherwin Williams and Ecolab
Can any of the company-specific risk be diversified away by investing in both Sherwin Williams and Ecolab 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 Ecolab into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Sherwin Williams and Ecolab Inc, you can compare the effects of market volatilities on Sherwin Williams and Ecolab 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 Ecolab. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sherwin Williams and Ecolab.
Diversification Opportunities for Sherwin Williams and Ecolab
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sherwin and Ecolab is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding The Sherwin Williams and Ecolab Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecolab Inc 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 The Sherwin Williams are associated (or correlated) with Ecolab. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecolab Inc has no effect on the direction of Sherwin Williams i.e., Sherwin Williams and Ecolab go up and down completely randomly.
Pair Corralation between Sherwin Williams and Ecolab
Assuming the 90 days horizon The Sherwin Williams is expected to generate 1.31 times more return on investment than Ecolab. However, Sherwin Williams is 1.31 times more volatile than Ecolab Inc. It trades about 0.33 of its potential returns per unit of risk. Ecolab Inc is currently generating about 0.06 per unit of risk. If you would invest 33,041 in The Sherwin Williams on September 1, 2024 and sell it today you would earn a total of 4,594 from holding The Sherwin Williams or generate 13.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Sherwin Williams vs. Ecolab Inc
Performance |
| Timeline |
| Sherwin Williams |
| Ecolab Inc |
Sherwin Williams and Ecolab Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sherwin Williams and Ecolab
The main advantage of trading using opposite Sherwin Williams and Ecolab positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sherwin Williams position performs unexpectedly, Ecolab 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 Ecolab will offset losses from the drop in Ecolab's long position.| Sherwin Williams vs. Nok Airlines PCL | Sherwin Williams vs. Commonwealth Bank of | Sherwin Williams vs. BW OFFSHORE LTD | Sherwin Williams vs. EIDESVIK OFFSHORE NK |
| Ecolab vs. The Sherwin Williams | Ecolab vs. SIKA AG UNSPADR | Ecolab vs. LyondellBasell Industries NV | Ecolab vs. Albemarle |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |