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 The Sherwin Williams 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

0.54

Correlation Coefficient

Sherwin Williams  Dupont De

Very weak diversification

The 3 months correlation between Sherwin and Dupont is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding The Sherwin Williams 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 The Sherwin Williams 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

Assuming the 90 days horizon Sherwin Williams is expected to generate 1.52 times less return on investment than Dupont De. In addition to that, Sherwin Williams is 1.18 times more volatile than Dupont De Nemours. It trades about 0.06 of its total potential returns per unit of risk. Dupont De Nemours is currently generating about 0.1 per unit of volatility. If you would invest  7,213  in Dupont De Nemours on September 12, 2024 and sell it today you would earn a total of  787.00  from holding Dupont De Nemours or generate 10.91% return on investment over 90 days.

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

The Sherwin Williams  vs.  Dupont De Nemours

Sherwin Williams

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in The Sherwin Williams are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Sherwin Williams may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Dupont De Nemours

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dupont De Nemours are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Dupont De may actually be approaching a critical reversion point that can send shares even higher in January 2025.

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 The Sherwin Williams 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.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.