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

0.36

Correlation Coefficient

Sherwin Williams  Dupont De

Weak diversification

The 3 months correlation between Sherwin and Dupont is 0.36. 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 generate 1.0 times more return on investment than Dupont De. However, Sherwin Williams is 1.0 times more volatile than Dupont De Nemours. It trades about 0.26 of its potential returns per unit of risk. Dupont De Nemours is currently generating about 0.03 per unit of risk. If you would invest  36,122  in Sherwin Williams Co on August 31, 2024 and sell it today you would earn a total of  3,274  from holding Sherwin Williams Co or generate 9.06% return on investment over 90 days.

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

Sherwin Williams Co  vs.  Dupont De Nemours

Sherwin Williams

Risk-Adjusted Performance

8 of 100

Modest

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 December 2024.

Dupont De Nemours

Risk-Adjusted Performance

2 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Dupont De Nemours are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Dupont De is not utilizing all of its potentials. The recent 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.