Correlation Between DENTSPLY SIRONA and Walmart

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

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

Diversification Opportunities for DENTSPLY SIRONA and Walmart

-0.75

Correlation Coefficient

DENTSPLY SIRONA  Walmart

Pay attention - limited upside

The 3 months correlation between DENTSPLY and Walmart is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding DENTSPLY SIRONA and Walmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walmart 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 Walmart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walmart has no effect on the direction of DENTSPLY SIRONA i.e., DENTSPLY SIRONA and Walmart go up and down completely randomly.

Pair Corralation between DENTSPLY SIRONA and Walmart

Assuming the 90 days trading horizon DENTSPLY SIRONA is expected to generate 1.5 times more return on investment than Walmart. However, DENTSPLY SIRONA is 1.5 times more volatile than Walmart. It trades about 0.0 of its potential returns per unit of risk. Walmart is currently generating about -0.01 per unit of risk. If you would invest  1,813  in DENTSPLY SIRONA on October 8, 2024 and sell it today you would lose (2.00) from holding DENTSPLY SIRONA or give up 0.11% of portfolio value over 90 days.

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

DENTSPLY SIRONA  vs.  Walmart

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.

Walmart

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Walmart are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Walmart reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with DENTSPLY SIRONA and Walmart

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

The idea behind DENTSPLY SIRONA and Walmart 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.