Correlation Between Varian Medical and Dentsply Sirona

Can any of the company-specific risk be diversified away by investing in both Varian Medical and Dentsply Sirona 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 Varian Medical and Dentsply Sirona into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Varian Medical Systems and Dentsply Sirona, you can compare the effects of market volatilities on Varian Medical and Dentsply Sirona 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 Varian Medical with a short position of Dentsply Sirona. Check out your portfolio center. Please also check ongoing floating volatility patterns of Varian Medical and Dentsply Sirona.

Diversification Opportunities for Varian Medical and Dentsply Sirona

0.0

Correlation Coefficient

Varian Medical  Dentsply Sirona

Pay attention - limited upside

The 3 months correlation between Varian and Dentsply is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Varian Medical Systems and Dentsply Sirona in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dentsply Sirona and Varian Medical 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 Varian Medical Systems are associated (or correlated) with Dentsply Sirona. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dentsply Sirona has no effect on the direction of Varian Medical i.e., Varian Medical and Dentsply Sirona go up and down completely randomly.

Pair Corralation between Varian Medical and Dentsply Sirona

If you would invest (100.00) in Varian Medical Systems on January 20, 2024 and sell it today you would earn a total of  100.00  from holding Varian Medical Systems or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Varian Medical Systems  vs.  Dentsply Sirona

Varian Medical Systems

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Varian Medical Systems has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Varian Medical is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Dentsply Sirona

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dentsply Sirona has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in May 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Varian Medical and Dentsply Sirona

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

The idea behind Varian Medical Systems and Dentsply Sirona 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.