Correlation Between Sherwin Williams and Dupont De

Can any of the company-specific risk be diversified away by investing in both Sherwin Williams and Dupont De 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 Dupont De 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 Dupont De Nemours, you can compare the effects of market volatilities on Sherwin Williams and Dupont De 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 Dupont De. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sherwin Williams and Dupont De.

Diversification Opportunities for Sherwin Williams and Dupont De

0.58

Correlation Coefficient

Sherwin Williams  Dupont De

Very weak diversification

The 3 months correlation between Sherwin and Dupont is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Sherwin Williams Co and Dupont De Nemours in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dupont De Nemours 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 Dupont De. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dupont De Nemours has no effect on the direction of Sherwin Williams i.e., Sherwin Williams and Dupont De go up and down completely randomly.

Pair Corralation between Sherwin Williams and Dupont De

Considering the 90-day investment horizon Sherwin Williams Co is expected to under-perform the Dupont De. In addition to that, Sherwin Williams is 1.23 times more volatile than Dupont De Nemours. It trades about -0.27 of its total potential returns per unit of risk. Dupont De Nemours is currently generating about -0.03 per unit of volatility. If you would invest  7,372  in Dupont De Nemours on January 19, 2024 and sell it today you would lose (63.00) from holding Dupont De Nemours or give up 0.85% of portfolio value over 90 days.

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

Sherwin Williams Co  vs.  Dupont De Nemours

Sherwin Williams

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sherwin Williams Co are ranked lower than 2 (%) 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 latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Dupont De Nemours

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dupont De Nemours has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Dupont De is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Sherwin Williams and Dupont De

The main advantage of trading using opposite Sherwin Williams and Dupont De positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sherwin Williams position performs unexpectedly, Dupont De 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 Dupont De will offset losses from the drop in Dupont De's long position.

The idea behind Sherwin Williams Co and Dupont De Nemours 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.