Correlation Between Chemtrade Logistics and Sherwin Williams

Can any of the company-specific risk be diversified away by investing in both Chemtrade Logistics 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 Chemtrade Logistics and Sherwin Williams into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Chemtrade Logistics Income and Sherwin Williams Co, you can compare the effects of market volatilities on Chemtrade Logistics 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 Chemtrade Logistics with a short position of Sherwin Williams. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chemtrade Logistics and Sherwin Williams.

Diversification Opportunities for Chemtrade Logistics and Sherwin Williams

-0.67

Correlation Coefficient

Chemtrade Logistics  Sherwin Williams

Excellent diversification

The 3 months correlation between Chemtrade and Sherwin is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Chemtrade Logistics Income and Sherwin Williams Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sherwin Williams and Chemtrade Logistics 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 Chemtrade Logistics Income 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 Chemtrade Logistics i.e., Chemtrade Logistics and Sherwin Williams go up and down completely randomly.

Pair Corralation between Chemtrade Logistics and Sherwin Williams

Assuming the 90 days horizon Chemtrade Logistics Income is expected to generate 0.71 times more return on investment than Sherwin Williams. However, Chemtrade Logistics Income is 1.41 times less risky than Sherwin Williams. It trades about -0.02 of its potential returns per unit of risk. Sherwin Williams Co is currently generating about -0.43 per unit of risk. If you would invest  620.00  in Chemtrade Logistics Income on January 24, 2024 and sell it today you would lose (3.00) from holding Chemtrade Logistics Income or give up 0.48% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Chemtrade Logistics Income  vs.  Sherwin Williams Co

Chemtrade Logistics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chemtrade Logistics Income has generated negative risk-adjusted returns adding no value to fund investors. Despite latest inconsistent performance, the Fund's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the mutual fund stockholders.

Sherwin Williams

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sherwin Williams Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable technical indicators, Sherwin Williams is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Chemtrade Logistics and Sherwin Williams

The main advantage of trading using opposite Chemtrade Logistics and Sherwin Williams positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chemtrade Logistics 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.

The idea behind Chemtrade Logistics Income and Sherwin Williams Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.