Correlation Between Sherwin Williams and LANXESS Aktiengesellscha
Can any of the company-specific risk be diversified away by investing in both Sherwin Williams and LANXESS Aktiengesellscha 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 LANXESS Aktiengesellscha 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 LANXESS Aktiengesellschaft, you can compare the effects of market volatilities on Sherwin Williams and LANXESS Aktiengesellscha 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 LANXESS Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sherwin Williams and LANXESS Aktiengesellscha.
Diversification Opportunities for Sherwin Williams and LANXESS Aktiengesellscha
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sherwin and LANXESS is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding The Sherwin Williams and LANXESS Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LANXESS Aktiengesellscha 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 LANXESS Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LANXESS Aktiengesellscha has no effect on the direction of Sherwin Williams i.e., Sherwin Williams and LANXESS Aktiengesellscha go up and down completely randomly.
Pair Corralation between Sherwin Williams and LANXESS Aktiengesellscha
Assuming the 90 days horizon The Sherwin Williams is expected to generate 0.84 times more return on investment than LANXESS Aktiengesellscha. However, The Sherwin Williams is 1.19 times less risky than LANXESS Aktiengesellscha. It trades about 0.35 of its potential returns per unit of risk. LANXESS Aktiengesellschaft is currently generating about -0.25 per unit of risk. If you would invest 32,816 in The Sherwin Williams on September 2, 2024 and sell it today you would earn a total of 4,819 from holding The Sherwin Williams or generate 14.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Sherwin Williams vs. LANXESS Aktiengesellschaft
Performance |
| Timeline |
| Sherwin Williams |
| LANXESS Aktiengesellscha |
Sherwin Williams and LANXESS Aktiengesellscha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sherwin Williams and LANXESS Aktiengesellscha
The main advantage of trading using opposite Sherwin Williams and LANXESS Aktiengesellscha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sherwin Williams position performs unexpectedly, LANXESS Aktiengesellscha 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 LANXESS Aktiengesellscha will offset losses from the drop in LANXESS Aktiengesellscha's long position.| Sherwin Williams vs. TYSON FOODS A | Sherwin Williams vs. Aluminum of | Sherwin Williams vs. United Natural Foods | Sherwin Williams vs. JJ SNACK FOODS |
| LANXESS Aktiengesellscha vs. ARDAGH METAL PACDL 0001 | LANXESS Aktiengesellscha vs. Kaiser Aluminum | LANXESS Aktiengesellscha vs. Corsair Gaming | LANXESS Aktiengesellscha vs. SYSTEMAIR AB |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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