Correlation Between Dentsply Sirona and Ryanair Holdings

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

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

Diversification Opportunities for Dentsply Sirona and Ryanair Holdings

-0.49

Correlation Coefficient

Dentsply Sirona  Ryanair Holdings

Very good diversification

The 3 months correlation between Dentsply and Ryanair is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Dentsply Sirona and Ryanair Holdings plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ryanair Holdings plc 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 Ryanair Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ryanair Holdings plc has no effect on the direction of Dentsply Sirona i.e., Dentsply Sirona and Ryanair Holdings go up and down completely randomly.

Pair Corralation between Dentsply Sirona and Ryanair Holdings

Assuming the 90 days trading horizon Dentsply Sirona is expected to under-perform the Ryanair Holdings. In addition to that, Dentsply Sirona is 1.03 times more volatile than Ryanair Holdings plc. It trades about -0.16 of its total potential returns per unit of risk. Ryanair Holdings plc is currently generating about 0.11 per unit of volatility. If you would invest  157,000  in Ryanair Holdings plc on December 25, 2024 and sell it today you would earn a total of  20,000  from holding Ryanair Holdings plc or generate 12.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	93.44%
Values	Daily Returns

Dentsply Sirona  vs.  Ryanair Holdings plc

Dentsply Sirona

Risk-Adjusted Performance

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 uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Ryanair Holdings plc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ryanair Holdings plc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain essential indicators, Ryanair Holdings disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dentsply Sirona and Ryanair Holdings

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

The idea behind Dentsply Sirona and Ryanair Holdings plc 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.