Correlation Between AptarGroup and Dentsply Sirona

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

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

Diversification Opportunities for AptarGroup and Dentsply Sirona

-0.43

Correlation Coefficient

AptarGroup  Dentsply Sirona

Very good diversification

The 3 months correlation between AptarGroup and Dentsply is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding AptarGroup and Dentsply Sirona in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dentsply Sirona and AptarGroup 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 AptarGroup 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 AptarGroup i.e., AptarGroup and Dentsply Sirona go up and down completely randomly.

Pair Corralation between AptarGroup and Dentsply Sirona

Considering the 90-day investment horizon AptarGroup is expected to generate 0.56 times more return on investment than Dentsply Sirona. However, AptarGroup is 1.78 times less risky than Dentsply Sirona. It trades about 0.08 of its potential returns per unit of risk. Dentsply Sirona is currently generating about -0.14 per unit of risk. If you would invest  14,000  in AptarGroup on January 29, 2024 and sell it today you would earn a total of  333.00  from holding AptarGroup or generate 2.38% return on investment over 90 days.

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

AptarGroup  vs.  Dentsply Sirona

AptarGroup

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AptarGroup are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, AptarGroup may actually be approaching a critical reversion point that can send shares even higher in May 2024.

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 inconsistent performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in May 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with AptarGroup and Dentsply Sirona

The main advantage of trading using opposite AptarGroup and Dentsply Sirona positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AptarGroup 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 AptarGroup 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.