Correlation Between DENTSPLY SIRONA and Elevance Health,

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

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

Diversification Opportunities for DENTSPLY SIRONA and Elevance Health,

0.19

Correlation Coefficient

DENTSPLY SIRONA  Elevance Health,

Average diversification

The 3 months correlation between DENTSPLY and Elevance is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding DENTSPLY SIRONA and Elevance Health, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elevance Health, 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 Elevance Health,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elevance Health, has no effect on the direction of DENTSPLY SIRONA i.e., DENTSPLY SIRONA and Elevance Health, go up and down completely randomly.

Pair Corralation between DENTSPLY SIRONA and Elevance Health,

Assuming the 90 days trading horizon DENTSPLY SIRONA is expected to generate 38.22 times less return on investment than Elevance Health,. But when comparing it to its historical volatility, DENTSPLY SIRONA is 12.42 times less risky than Elevance Health,. It trades about 0.01 of its potential returns per unit of risk. Elevance Health, is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  46,878  in Elevance Health, on October 23, 2024 and sell it today you would earn a total of  786.00  from holding Elevance Health, or generate 1.68% return on investment over 90 days.

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

DENTSPLY SIRONA  vs.  Elevance Health,

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 somewhat strong basic indicators, DENTSPLY SIRONA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Elevance Health,

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Elevance Health, are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong essential indicators, Elevance Health, is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with DENTSPLY SIRONA and Elevance Health,

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

The idea behind DENTSPLY SIRONA and Elevance Health, 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.

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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.