Correlation Between DENTSPLY SIRONA and Sunstone Hotel
Can any of the company-specific risk be diversified away by investing in both DENTSPLY SIRONA and Sunstone Hotel 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 Sunstone Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DENTSPLY SIRONA and Sunstone Hotel Investors, you can compare the effects of market volatilities on DENTSPLY SIRONA and Sunstone Hotel 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 Sunstone Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of DENTSPLY SIRONA and Sunstone Hotel.
Diversification Opportunities for DENTSPLY SIRONA and Sunstone Hotel
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between DENTSPLY and Sunstone is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding DENTSPLY SIRONA and Sunstone Hotel Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunstone Hotel Investors 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 Sunstone Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunstone Hotel Investors has no effect on the direction of DENTSPLY SIRONA i.e., DENTSPLY SIRONA and Sunstone Hotel go up and down completely randomly.
Pair Corralation between DENTSPLY SIRONA and Sunstone Hotel
Assuming the 90 days trading horizon DENTSPLY SIRONA is expected to under-perform the Sunstone Hotel. In addition to that, DENTSPLY SIRONA is 2.0 times more volatile than Sunstone Hotel Investors. It trades about -0.06 of its total potential returns per unit of risk. Sunstone Hotel Investors is currently generating about 0.19 per unit of volatility. If you would invest 918.00 in Sunstone Hotel Investors on October 7, 2024 and sell it today you would earn a total of 222.00 from holding Sunstone Hotel Investors or generate 24.18% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
DENTSPLY SIRONA vs. Sunstone Hotel Investors
Performance |
Timeline |
DENTSPLY SIRONA |
Sunstone Hotel Investors |
DENTSPLY SIRONA and Sunstone Hotel Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with DENTSPLY SIRONA and Sunstone Hotel
The main advantage of trading using opposite DENTSPLY SIRONA and Sunstone Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DENTSPLY SIRONA position performs unexpectedly, Sunstone Hotel 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 Sunstone Hotel will offset losses from the drop in Sunstone Hotel's long position.DENTSPLY SIRONA vs. Apple Inc | DENTSPLY SIRONA vs. Apple Inc | DENTSPLY SIRONA vs. Apple Inc | DENTSPLY SIRONA vs. Apple Inc |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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