Correlation Between Dentsply Sirona and DexCom
Can any of the company-specific risk be diversified away by investing in both Dentsply Sirona and DexCom 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 Dentsply Sirona and DexCom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dentsply Sirona and DexCom Inc, you can compare the effects of market volatilities on Dentsply Sirona and DexCom 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 Dentsply Sirona with a short position of DexCom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dentsply Sirona and DexCom.
Diversification Opportunities for Dentsply Sirona and DexCom
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dentsply and DexCom is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Dentsply Sirona and DexCom Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DexCom Inc and Dentsply Sirona 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 Dentsply Sirona are associated (or correlated) with DexCom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DexCom Inc has no effect on the direction of Dentsply Sirona i.e., Dentsply Sirona and DexCom go up and down completely randomly.
Pair Corralation between Dentsply Sirona and DexCom
Given the investment horizon of 90 days Dentsply Sirona is expected to under-perform the DexCom. But the stock apears to be less risky and, when comparing its historical volatility, Dentsply Sirona is 1.24 times less risky than DexCom. The stock trades about -0.19 of its potential returns per unit of risk. The DexCom Inc is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 14,010 in DexCom Inc on January 25, 2024 and sell it today you would lose (610.00) from holding DexCom Inc or give up 4.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dentsply Sirona vs. DexCom Inc
Performance |
| Timeline |
| Dentsply Sirona |
| DexCom Inc |
Dentsply Sirona and DexCom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dentsply Sirona and DexCom
The main advantage of trading using opposite Dentsply Sirona and DexCom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dentsply Sirona position performs unexpectedly, DexCom 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 DexCom will offset losses from the drop in DexCom's long position.| Dentsply Sirona vs. Merit Medical Systems | Dentsply Sirona vs. ICU Medical | Dentsply Sirona vs. The Cooper Companies | Dentsply Sirona vs. AngioDynamics |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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