Correlation Between Dentsply Sirona and GRIT Real

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

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

Diversification Opportunities for Dentsply Sirona and GRIT Real

0.85

Correlation Coefficient

Dentsply Sirona  GRIT Real

Very poor diversification

The 3 months correlation between Dentsply and GRIT is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Dentsply Sirona and GRIT Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GRIT Real Estate 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 GRIT Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GRIT Real Estate has no effect on the direction of Dentsply Sirona i.e., Dentsply Sirona and GRIT Real go up and down completely randomly.

Pair Corralation between Dentsply Sirona and GRIT Real

Assuming the 90 days trading horizon Dentsply Sirona is expected to under-perform the GRIT Real. In addition to that, Dentsply Sirona is 2.84 times more volatile than GRIT Real Estate. It trades about -0.1 of its total potential returns per unit of risk. GRIT Real Estate is currently generating about -0.16 per unit of volatility. If you would invest  1,175  in GRIT Real Estate on October 7, 2024 and sell it today you would lose (125.00) from holding GRIT Real Estate or give up 10.64% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	97.56%
Values	Daily Returns

Dentsply Sirona  vs.  GRIT Real Estate

Dentsply Sirona

Risk-Adjusted Performance

0 of 100

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 February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

GRIT Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GRIT Real Estate has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Dentsply Sirona and GRIT Real

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

The idea behind Dentsply Sirona and GRIT Real Estate 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.

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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.