Correlation Between Dentsply Sirona and Futura Medical

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

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

Diversification Opportunities for Dentsply Sirona and Futura Medical

-0.04

Correlation Coefficient

Dentsply Sirona  Futura Medical

Good diversification

The 3 months correlation between Dentsply and Futura is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Dentsply Sirona and Futura Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Futura Medical 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 Futura Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Futura Medical has no effect on the direction of Dentsply Sirona i.e., Dentsply Sirona and Futura Medical go up and down completely randomly.

Pair Corralation between Dentsply Sirona and Futura Medical

Assuming the 90 days trading horizon Dentsply Sirona is expected to generate 0.33 times more return on investment than Futura Medical. However, Dentsply Sirona is 3.04 times less risky than Futura Medical. It trades about -0.14 of its potential returns per unit of risk. Futura Medical is currently generating about -0.18 per unit of risk. If you would invest  1,957  in Dentsply Sirona on December 2, 2024 and sell it today you would lose (327.00) from holding Dentsply Sirona or give up 16.71% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	93.65%
Values	Daily Returns

Dentsply Sirona  vs.  Futura Medical

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.

Futura Medical

Risk-Adjusted Performance

Very Weak

Over the last 90 days Futura Medical 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 technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Dentsply Sirona and Futura Medical

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

The idea behind Dentsply Sirona and Futura Medical 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.