Correlation Between Synalloy and Sherwin Williams
Can any of the company-specific risk be diversified away by investing in both Synalloy and Sherwin Williams 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 Synalloy and Sherwin Williams into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Synalloy and Sherwin Williams Co, you can compare the effects of market volatilities on Synalloy and Sherwin Williams 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 Synalloy with a short position of Sherwin Williams. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synalloy and Sherwin Williams.
Diversification Opportunities for Synalloy and Sherwin Williams
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Synalloy and Sherwin is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Synalloy and Sherwin Williams Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sherwin Williams and Synalloy 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 Synalloy are associated (or correlated) with Sherwin Williams. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sherwin Williams has no effect on the direction of Synalloy i.e., Synalloy and Sherwin Williams go up and down completely randomly.
Pair Corralation between Synalloy and Sherwin Williams
Given the investment horizon of 90 days Synalloy is expected to under-perform the Sherwin Williams. In addition to that, Synalloy is 1.76 times more volatile than Sherwin Williams Co. It trades about -0.01 of its total potential returns per unit of risk. Sherwin Williams Co is currently generating about 0.02 per unit of volatility. If you would invest 27,165 in Sherwin Williams Co on January 25, 2024 and sell it today you would earn a total of 3,071 from holding Sherwin Williams Co or generate 11.3% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Synalloy vs. Sherwin Williams Co
Performance |
Timeline |
Synalloy |
Sherwin Williams |
Synalloy and Sherwin Williams Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Synalloy and Sherwin Williams
The main advantage of trading using opposite Synalloy and Sherwin Williams positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synalloy position performs unexpectedly, Sherwin Williams 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 Sherwin Williams will offset losses from the drop in Sherwin Williams' long position.Synalloy vs. Paramount Gold Nevada | Synalloy vs. Liberty Gold Corp | Synalloy vs. International Tower Hill | Synalloy vs. Allegiant Gold |
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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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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