Correlation Between Dentsply Sirona and Coeur Mining

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

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

Diversification Opportunities for Dentsply Sirona and Coeur Mining

0.49

Correlation Coefficient

Dentsply Sirona  Coeur Mining

Very weak diversification

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

Pair Corralation between Dentsply Sirona and Coeur Mining

Assuming the 90 days horizon Dentsply Sirona is expected to under-perform the Coeur Mining. In addition to that, Dentsply Sirona is 4.21 times more volatile than Coeur Mining. It trades about -0.08 of its total potential returns per unit of risk. Coeur Mining is currently generating about -0.01 per unit of volatility. If you would invest  360.00  in Coeur Mining on October 7, 2024 and sell it today you would lose (2.00) from holding Coeur Mining or give up 0.56% of portfolio value over 90 days.

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

Dentsply Sirona  vs.  Coeur Mining

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.

Coeur Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Coeur Mining has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Coeur Mining is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Dentsply Sirona and Coeur Mining

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

The idea behind Dentsply Sirona and Coeur Mining 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.