Correlation Between Sherwin Williams and Air Liquide
Can any of the company-specific risk be diversified away by investing in both Sherwin Williams and Air Liquide 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 Air Liquide 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 Air Liquide SA, you can compare the effects of market volatilities on Sherwin Williams and Air Liquide 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 Air Liquide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sherwin Williams and Air Liquide.
Diversification Opportunities for Sherwin Williams and Air Liquide
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sherwin and Air is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Sherwin Williams Co and Air Liquide SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Liquide SA 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 Air Liquide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Liquide SA has no effect on the direction of Sherwin Williams i.e., Sherwin Williams and Air Liquide go up and down completely randomly.
Pair Corralation between Sherwin Williams and Air Liquide
Considering the 90-day investment horizon Sherwin Williams Co is expected to under-perform the Air Liquide. In addition to that, Sherwin Williams is 1.34 times more volatile than Air Liquide SA. It trades about -0.37 of its total potential returns per unit of risk. Air Liquide SA is currently generating about -0.3 per unit of volatility. If you would invest 4,269 in Air Liquide SA on January 20, 2024 and sell it today you would lose (273.00) from holding Air Liquide SA or give up 6.39% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Sherwin Williams Co vs. Air Liquide SA
Performance |
Timeline |
Sherwin Williams |
Air Liquide SA |
Sherwin Williams and Air Liquide Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sherwin Williams and Air Liquide
The main advantage of trading using opposite Sherwin Williams and Air Liquide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sherwin Williams position performs unexpectedly, Air Liquide 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 Air Liquide will offset losses from the drop in Air Liquide's long position.Sherwin Williams vs. Greystone Logistics | Sherwin Williams vs. C Bond Systems | Sherwin Williams vs. Perimeter Solutions SA | Sherwin Williams vs. Avoca LLC |
Air Liquide vs. Alumina Limited | Air Liquide vs. HUMANA INC | Air Liquide vs. Aquagold International | Air Liquide vs. Spring Valley Acquisition |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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