Correlation Between Sherwin Williams and IsraelLtd

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

Diversification Opportunities for Sherwin Williams and IsraelLtd

-0.38

Correlation Coefficient

Sherwin Williams  IsraelLtd

Very good diversification

The 3 months correlation between Sherwin and IsraelLtd is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Sherwin Williams Co and Israel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IsraelLtd 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 IsraelLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IsraelLtd has no effect on the direction of Sherwin Williams i.e., Sherwin Williams and IsraelLtd go up and down completely randomly.

Pair Corralation between Sherwin Williams and IsraelLtd

Considering the 90-day investment horizon Sherwin Williams is expected to generate 57.47 times less return on investment than IsraelLtd. But when comparing it to its historical volatility, Sherwin Williams Co is 9.73 times less risky than IsraelLtd. It trades about 0.01 of its potential returns per unit of risk. Israel is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  24,700  in Israel on December 30, 2024 and sell it today you would earn a total of  3,800  from holding Israel or generate 15.38% return on investment over 90 days.

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

Sherwin Williams Co  vs.  Israel

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 1 (%) 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.

IsraelLtd

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Israel are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental indicators, IsraelLtd reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sherwin Williams and IsraelLtd

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

The idea behind Sherwin Williams Co and Israel 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.