Correlation Between SHERWIN and Burford Capital

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

By analyzing existing cross correlation between SHERWIN WILLIAMS 345 percent and Burford Capital, you can compare the effects of market volatilities on SHERWIN and Burford Capital 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 with a short position of Burford Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of SHERWIN and Burford Capital.

Diversification Opportunities for SHERWIN and Burford Capital

0.06

Correlation Coefficient

SHERWIN  Burford Capital

Significant diversification

The 3 months correlation between SHERWIN and Burford is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding SHERWIN WILLIAMS 345 percent and Burford Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burford Capital and SHERWIN 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 345 percent are associated (or correlated) with Burford Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Burford Capital has no effect on the direction of SHERWIN i.e., SHERWIN and Burford Capital go up and down completely randomly.

Pair Corralation between SHERWIN and Burford Capital

If you would invest  794.00  in Burford Capital on January 25, 2024 and sell it today you would earn a total of  744.00  from holding Burford Capital or generate 93.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

SHERWIN WILLIAMS 345 percent  vs.  Burford Capital

SHERWIN WILLIAMS 345

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SHERWIN WILLIAMS 345 percent has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, SHERWIN is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Burford Capital

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Burford Capital are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Burford Capital is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with SHERWIN and Burford Capital

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

The idea behind SHERWIN WILLIAMS 345 percent and Burford Capital 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 AI Investment Finder module to use AI to screen and filter profitable investment opportunities.