Correlation Between Minerals Technologies and Sherwin Williams

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

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

Diversification Opportunities for Minerals Technologies and Sherwin Williams

0.47

Correlation Coefficient

Minerals Technologies  Sherwin Williams

Very weak diversification

The 3 months correlation between Minerals and Sherwin is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Minerals Technologies and Sherwin Williams Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sherwin Williams and Minerals Technologies 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 Minerals Technologies 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 Minerals Technologies i.e., Minerals Technologies and Sherwin Williams go up and down completely randomly.

Pair Corralation between Minerals Technologies and Sherwin Williams

Considering the 90-day investment horizon Minerals Technologies is expected to generate 1.38 times more return on investment than Sherwin Williams. However, Minerals Technologies is 1.38 times more volatile than Sherwin Williams Co. It trades about 0.08 of its potential returns per unit of risk. Sherwin Williams Co is currently generating about 0.09 per unit of risk. If you would invest  7,630  in Minerals Technologies on August 26, 2024 and sell it today you would earn a total of  709.00  from holding Minerals Technologies or generate 9.29% return on investment over 90 days.

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

Minerals Technologies  vs.  Sherwin Williams Co

Minerals Technologies

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Minerals Technologies are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Minerals Technologies may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Sherwin Williams

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sherwin Williams Co are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical indicators, Sherwin Williams may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Minerals Technologies and Sherwin Williams

The main advantage of trading using opposite Minerals Technologies and Sherwin Williams positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Minerals Technologies 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 Minerals Technologies 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..