Correlation Between Dentsply Sirona and Warby Parker

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

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

Diversification Opportunities for Dentsply Sirona and Warby Parker

0.78

Correlation Coefficient

Dentsply Sirona  Warby Parker

Poor diversification

The 3 months correlation between Dentsply and Warby is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Dentsply Sirona and Warby Parker in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Warby Parker 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 Warby Parker. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Warby Parker has no effect on the direction of Dentsply Sirona i.e., Dentsply Sirona and Warby Parker go up and down completely randomly.

Pair Corralation between Dentsply Sirona and Warby Parker

Given the investment horizon of 90 days Dentsply Sirona is expected to generate 0.62 times more return on investment than Warby Parker. However, Dentsply Sirona is 1.61 times less risky than Warby Parker. It trades about -0.13 of its potential returns per unit of risk. Warby Parker is currently generating about -0.12 per unit of risk. If you would invest  1,879  in Dentsply Sirona on December 21, 2024 and sell it today you would lose (319.00) from holding Dentsply Sirona or give up 16.98% of portfolio value over 90 days.

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

Dentsply Sirona  vs.  Warby Parker

Dentsply Sirona

Risk-Adjusted Performance

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 inconsistent performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Warby Parker

Risk-Adjusted Performance

Very Weak

Over the last 90 days Warby Parker has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's fundamental drivers remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Dentsply Sirona and Warby Parker

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

The idea behind Dentsply Sirona and Warby Parker 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.