Correlation Between Livent Corp and Sherwin Williams

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

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

Diversification Opportunities for Livent Corp and Sherwin Williams

0.0

Correlation Coefficient

Livent Corp  Sherwin Williams

Pay attention - limited upside

The 3 months correlation between Livent and Sherwin is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Livent Corp and Sherwin Williams Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sherwin Williams and Livent Corp 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 Livent Corp 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 Livent Corp i.e., Livent Corp and Sherwin Williams go up and down completely randomly.

Pair Corralation between Livent Corp and Sherwin Williams

If you would invest  33,801  in Sherwin Williams Co on December 28, 2024 and sell it today you would earn a total of  764.00  from holding Sherwin Williams Co or generate 2.26% return on investment over 90 days.

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

Livent Corp  vs.  Sherwin Williams Co

Livent Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Livent Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical indicators, Livent Corp is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Sherwin Williams

Risk-Adjusted Performance

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.

Pair Trading with Livent Corp and Sherwin Williams

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

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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.