Correlation Between Dentsply Sirona and Avinger

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

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

Diversification Opportunities for Dentsply Sirona and Avinger

-0.18

Correlation Coefficient

Dentsply Sirona  Avinger

Good diversification

The 3 months correlation between Dentsply and Avinger is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Dentsply Sirona and Avinger in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avinger 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 Avinger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avinger has no effect on the direction of Dentsply Sirona i.e., Dentsply Sirona and Avinger go up and down completely randomly.

Pair Corralation between Dentsply Sirona and Avinger

Given the investment horizon of 90 days Dentsply Sirona is expected to generate 0.32 times more return on investment than Avinger. However, Dentsply Sirona is 3.16 times less risky than Avinger. It trades about -0.24 of its potential returns per unit of risk. Avinger is currently generating about -0.46 per unit of risk. If you would invest  3,018  in Dentsply Sirona on March 2, 2024 and sell it today you would lose (243.00) from holding Dentsply Sirona or give up 8.05% of portfolio value over 90 days.

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

Dentsply Sirona  vs.  Avinger

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 inconsistent performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in July 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Avinger

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Avinger has generated negative risk-adjusted returns adding no value to investors with long positions. Even with conflicting performance in the last few months, the Stock's technical and fundamental indicators remain relatively invariable which may send shares a bit higher in July 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Dentsply Sirona and Avinger

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

The idea behind Dentsply Sirona and Avinger 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..