Correlation Between Dentsply Sirona and United Utilities
Can any of the company-specific risk be diversified away by investing in both Dentsply Sirona and United Utilities 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 United Utilities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dentsply Sirona and United Utilities Group, you can compare the effects of market volatilities on Dentsply Sirona and United Utilities 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 United Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dentsply Sirona and United Utilities.
Diversification Opportunities for Dentsply Sirona and United Utilities
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dentsply and United is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Dentsply Sirona and United Utilities Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Utilities 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 United Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Utilities has no effect on the direction of Dentsply Sirona i.e., Dentsply Sirona and United Utilities go up and down completely randomly.
Pair Corralation between Dentsply Sirona and United Utilities
Assuming the 90 days trading horizon Dentsply Sirona is expected to generate 1.28 times more return on investment than United Utilities. However, Dentsply Sirona is 1.28 times more volatile than United Utilities Group. It trades about 0.28 of its potential returns per unit of risk. United Utilities Group is currently generating about 0.08 per unit of risk. If you would invest 1,772 in Dentsply Sirona on September 12, 2024 and sell it today you would earn a total of 186.00 from holding Dentsply Sirona or generate 10.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Dentsply Sirona vs. United Utilities Group
Performance |
| Timeline |
| Dentsply Sirona |
| United Utilities |
Dentsply Sirona and United Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dentsply Sirona and United Utilities
The main advantage of trading using opposite Dentsply Sirona and United Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dentsply Sirona position performs unexpectedly, United Utilities 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 United Utilities will offset losses from the drop in United Utilities' long position.| Dentsply Sirona vs. Hong Kong Land | Dentsply Sirona vs. Neometals | Dentsply Sirona vs. Coor Service Management | Dentsply Sirona vs. Fidelity Sustainable USD |
| United Utilities vs. Vitec Software Group | United Utilities vs. Ecofin Global Utilities | United Utilities vs. Everyman Media Group | United Utilities vs. Catena Media PLC |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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