Correlation Between DENTSPLY SIRONA and CDW

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

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

Diversification Opportunities for DENTSPLY SIRONA and CDW

0.84

Correlation Coefficient

DENTSPLY SIRONA  CDW

Very poor diversification

The 3 months correlation between DENTSPLY and CDW is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding DENTSPLY SIRONA and CDW Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CDW Corporation 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 CDW. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CDW Corporation has no effect on the direction of DENTSPLY SIRONA i.e., DENTSPLY SIRONA and CDW go up and down completely randomly.

Pair Corralation between DENTSPLY SIRONA and CDW

Assuming the 90 days trading horizon DENTSPLY SIRONA is expected to generate 1.58 times less return on investment than CDW. In addition to that, DENTSPLY SIRONA is 1.5 times more volatile than CDW Corporation. It trades about 0.05 of its total potential returns per unit of risk. CDW Corporation is currently generating about 0.12 per unit of volatility. If you would invest  14,955  in CDW Corporation on April 22, 2025 and sell it today you would earn a total of  435.00  from holding CDW Corporation or generate 2.91% return on investment over 90 days.

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

DENTSPLY SIRONA  vs.  CDW Corp.

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.

CDW Corporation

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CDW Corporation are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, CDW reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with DENTSPLY SIRONA and CDW

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

The idea behind DENTSPLY SIRONA and CDW Corporation 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..