Correlation Between Becton Dickinson and Dentsply Sirona

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

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

Diversification Opportunities for Becton Dickinson and Dentsply Sirona

-0.6

Correlation Coefficient

Becton Dickinson  Dentsply Sirona

Excellent diversification

The 3 months correlation between Becton and Dentsply is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Becton Dickinson and and Dentsply Sirona in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dentsply Sirona and Becton Dickinson 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 Becton Dickinson and 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 Becton Dickinson i.e., Becton Dickinson and Dentsply Sirona go up and down completely randomly.

Pair Corralation between Becton Dickinson and Dentsply Sirona

Assuming the 90 days horizon Becton Dickinson and is expected to under-perform the Dentsply Sirona. But the stock apears to be less risky and, when comparing its historical volatility, Becton Dickinson and is 1.32 times less risky than Dentsply Sirona. The stock trades about -0.04 of its potential returns per unit of risk. The Dentsply Sirona is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  1,114  in Dentsply Sirona on April 20, 2025 and sell it today you would earn a total of  240.00  from holding Dentsply Sirona or generate 21.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Becton Dickinson and  vs.  Dentsply Sirona

Becton Dickinson

Risk-Adjusted Performance

Very Weak

Over the last 90 days Becton Dickinson and has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Dentsply Sirona

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dentsply Sirona are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Dentsply Sirona reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Becton Dickinson and Dentsply Sirona

The main advantage of trading using opposite Becton Dickinson and Dentsply Sirona positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Becton Dickinson 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 Becton Dickinson and 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.

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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..