Correlation Between Haydale Graphene and Sherwin Williams

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

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

Diversification Opportunities for Haydale Graphene and Sherwin Williams

-0.11

Correlation Coefficient

Haydale Graphene  Sherwin Williams

Good diversification

The 3 months correlation between Haydale and Sherwin is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Haydale Graphene Industries and Sherwin Williams Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sherwin Williams and Haydale Graphene 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 Haydale Graphene Industries 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 Haydale Graphene i.e., Haydale Graphene and Sherwin Williams go up and down completely randomly.

Pair Corralation between Haydale Graphene and Sherwin Williams

Assuming the 90 days horizon Haydale Graphene Industries is expected to generate 12.23 times more return on investment than Sherwin Williams. However, Haydale Graphene is 12.23 times more volatile than Sherwin Williams Co. It trades about 0.06 of its potential returns per unit of risk. Sherwin Williams Co is currently generating about 0.07 per unit of risk. If you would invest  2.00  in Haydale Graphene Industries on September 4, 2024 and sell it today you would lose (1.74) from holding Haydale Graphene Industries or give up 87.0% of portfolio value over 90 days.

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

Haydale Graphene Industries  vs.  Sherwin Williams Co

Haydale Graphene Ind

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Haydale Graphene Industries are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical indicators, Haydale Graphene reported solid returns over the last few months and may actually be approaching a breakup point.

Sherwin Williams

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sherwin Williams Co are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady technical indicators, Sherwin Williams may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Haydale Graphene and Sherwin Williams

The main advantage of trading using opposite Haydale Graphene and Sherwin Williams positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haydale Graphene 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 Haydale Graphene Industries 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.