Correlation Between Fair Oaks and Dentsply Sirona

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

By analyzing existing cross correlation between Fair Oaks Income and Dentsply Sirona, you can compare the effects of market volatilities on Fair Oaks and Dentsply Sirona 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 Fair Oaks with a short position of Dentsply Sirona. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fair Oaks and Dentsply Sirona.

Diversification Opportunities for Fair Oaks and Dentsply Sirona

-0.57

Correlation Coefficient

Fair Oaks  Dentsply Sirona

Excellent diversification

The 3 months correlation between Fair and Dentsply is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Fair Oaks Income and Dentsply Sirona in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dentsply Sirona and Fair Oaks 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 Fair Oaks Income are associated (or correlated) with Dentsply Sirona. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dentsply Sirona has no effect on the direction of Fair Oaks i.e., Fair Oaks and Dentsply Sirona go up and down completely randomly.

Pair Corralation between Fair Oaks and Dentsply Sirona

Assuming the 90 days trading horizon Fair Oaks is expected to generate 1.01 times less return on investment than Dentsply Sirona. But when comparing it to its historical volatility, Fair Oaks Income is 2.72 times less risky than Dentsply Sirona. It trades about 0.21 of its potential returns per unit of risk. Dentsply Sirona is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,849  in Dentsply Sirona on September 19, 2024 and sell it today you would earn a total of  60.00  from holding Dentsply Sirona or generate 3.24% return on investment over 90 days.

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

Fair Oaks Income  vs.  Dentsply Sirona

Fair Oaks Income

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fair Oaks Income are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Fair Oaks is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

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

Pair Trading with Fair Oaks and Dentsply Sirona

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

The idea behind Fair Oaks Income and Dentsply Sirona 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.