Correlation Between DENTSPLY SIRONA and Avanos Medical

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

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

Diversification Opportunities for DENTSPLY SIRONA and Avanos Medical

0.04

Correlation Coefficient

DENTSPLY SIRONA  Avanos Medical

Significant diversification

The 3 months correlation between DENTSPLY and Avanos is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding DENTSPLY SIRONA and Avanos Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avanos Medical 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 Avanos Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avanos Medical has no effect on the direction of DENTSPLY SIRONA i.e., DENTSPLY SIRONA and Avanos Medical go up and down completely randomly.

Pair Corralation between DENTSPLY SIRONA and Avanos Medical

Assuming the 90 days trading horizon DENTSPLY SIRONA is expected to generate 1.31 times more return on investment than Avanos Medical. However, DENTSPLY SIRONA is 1.31 times more volatile than Avanos Medical. It trades about 0.11 of its potential returns per unit of risk. Avanos Medical is currently generating about -0.03 per unit of risk. If you would invest  1,194  in DENTSPLY SIRONA on April 25, 2025 and sell it today you would earn a total of  242.00  from holding DENTSPLY SIRONA or generate 20.27% 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.  Avanos Medical

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. In spite of comparatively fragile basic indicators, DENTSPLY SIRONA unveiled solid returns over the last few months and may actually be approaching a breakup point.

Avanos Medical

Risk-Adjusted Performance

Very Weak

Over the last 90 days Avanos Medical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Avanos Medical is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with DENTSPLY SIRONA and Avanos Medical

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

The idea behind DENTSPLY SIRONA and Avanos Medical 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.