Correlation Between Dentsply Sirona and BioNTech

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

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

Diversification Opportunities for Dentsply Sirona and BioNTech

-0.09

Correlation Coefficient

Dentsply Sirona  BioNTech

Good diversification

The 3 months correlation between Dentsply and BioNTech is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Dentsply Sirona and BioNTech SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNTech SE 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 BioNTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioNTech SE has no effect on the direction of Dentsply Sirona i.e., Dentsply Sirona and BioNTech go up and down completely randomly.

Pair Corralation between Dentsply Sirona and BioNTech

Assuming the 90 days horizon Dentsply Sirona is expected to under-perform the BioNTech. In addition to that, Dentsply Sirona is 1.31 times more volatile than BioNTech SE. It trades about -0.06 of its total potential returns per unit of risk. BioNTech SE is currently generating about 0.04 per unit of volatility. If you would invest  11,000  in BioNTech SE on October 8, 2024 and sell it today you would earn a total of  460.00  from holding BioNTech SE or generate 4.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Dentsply Sirona  vs.  BioNTech SE

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. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

BioNTech SE

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BioNTech SE are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, BioNTech may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Dentsply Sirona and BioNTech

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

The idea behind Dentsply Sirona and BioNTech SE 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.