Correlation Between Applied Materials, and DENTSPLY SIRONA
Can any of the company-specific risk be diversified away by investing in both Applied Materials, 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 Applied Materials, and DENTSPLY SIRONA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Applied Materials, and DENTSPLY SIRONA, you can compare the effects of market volatilities on Applied Materials, 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 Applied Materials, with a short position of DENTSPLY SIRONA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Materials, and DENTSPLY SIRONA.
Diversification Opportunities for Applied Materials, and DENTSPLY SIRONA
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Applied and DENTSPLY is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Applied Materials, and DENTSPLY SIRONA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DENTSPLY SIRONA and Applied Materials, 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 Applied Materials, 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 Applied Materials, i.e., Applied Materials, and DENTSPLY SIRONA go up and down completely randomly.
Pair Corralation between Applied Materials, and DENTSPLY SIRONA
Assuming the 90 days trading horizon Applied Materials, is expected to generate 18.2 times more return on investment than DENTSPLY SIRONA. However, Applied Materials, is 18.2 times more volatile than DENTSPLY SIRONA. It trades about 0.09 of its potential returns per unit of risk. DENTSPLY SIRONA is currently generating about 0.24 per unit of risk. If you would invest 10,173 in Applied Materials, on October 17, 2024 and sell it today you would earn a total of 320.00 from holding Applied Materials, or generate 3.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Applied Materials, vs. DENTSPLY SIRONA
Performance |
| Timeline |
| Applied Materials, |
| DENTSPLY SIRONA |
Applied Materials, and DENTSPLY SIRONA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Applied Materials, and DENTSPLY SIRONA
The main advantage of trading using opposite Applied Materials, and DENTSPLY SIRONA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Materials, 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.| Applied Materials, vs. STMicroelectronics NV | Applied Materials, vs. Zoom Video Communications | Applied Materials, vs. Charter Communications | Applied Materials, vs. Liberty Broadband |
| DENTSPLY SIRONA vs. Brpr Corporate Offices | DENTSPLY SIRONA vs. Nordon Indstrias Metalrgicas | DENTSPLY SIRONA vs. Applied Materials, | DENTSPLY SIRONA vs. Metalurgica Gerdau SA |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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