Correlation Between United Utilities and Dentsply Sirona
Can any of the company-specific risk be diversified away by investing in both United Utilities 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 United Utilities and Dentsply Sirona into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Utilities Group and Dentsply Sirona, you can compare the effects of market volatilities on United Utilities 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 United Utilities with a short position of Dentsply Sirona. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Utilities and Dentsply Sirona.
Diversification Opportunities for United Utilities and Dentsply Sirona
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between United and Dentsply is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding United Utilities Group and Dentsply Sirona in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dentsply Sirona and United Utilities 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 United Utilities Group 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 United Utilities i.e., United Utilities and Dentsply Sirona go up and down completely randomly.
Pair Corralation between United Utilities and Dentsply Sirona
Assuming the 90 days trading horizon United Utilities Group is expected to generate 0.22 times more return on investment than Dentsply Sirona. However, United Utilities Group is 4.57 times less risky than Dentsply Sirona. It trades about 0.32 of its potential returns per unit of risk. Dentsply Sirona is currently generating about -0.11 per unit of risk. If you would invest 101,136 in United Utilities Group on September 4, 2024 and sell it today you would earn a total of 10,264 from holding United Utilities Group or generate 10.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
United Utilities Group vs. Dentsply Sirona
Performance |
| Timeline |
| United Utilities |
| Dentsply Sirona |
United Utilities and Dentsply Sirona Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Utilities and Dentsply Sirona
The main advantage of trading using opposite United Utilities and Dentsply Sirona positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Utilities 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.| United Utilities vs. Herald Investment Trust | United Utilities vs. CVS Health Corp | United Utilities vs. Aurora Investment Trust | United Utilities vs. Inspiration Healthcare Group |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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