Correlation Between ResMed and Dentsply Sirona

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

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

Diversification Opportunities for ResMed and Dentsply Sirona

0.8

Correlation Coefficient

ResMed  Dentsply Sirona

Very poor diversification

The 3 months correlation between ResMed and Dentsply is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding ResMed Inc and Dentsply Sirona in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dentsply Sirona and ResMed 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 ResMed Inc 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 ResMed i.e., ResMed and Dentsply Sirona go up and down completely randomly.

Pair Corralation between ResMed and Dentsply Sirona

Assuming the 90 days horizon ResMed is expected to generate 1.66 times less return on investment than Dentsply Sirona. But when comparing it to its historical volatility, ResMed Inc is 2.78 times less risky than Dentsply Sirona. It trades about 0.14 of its potential returns per unit of risk. Dentsply Sirona is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  1,201  in Dentsply Sirona on April 24, 2025 and sell it today you would earn a total of  192.00  from holding Dentsply Sirona or generate 15.99% return on investment over 90 days.

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

ResMed Inc  vs.  Dentsply Sirona

ResMed Inc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ResMed Inc are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, ResMed may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Dentsply Sirona

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Dentsply Sirona are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Dentsply Sirona reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ResMed and Dentsply Sirona

The main advantage of trading using opposite ResMed and Dentsply Sirona positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ResMed 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 ResMed Inc 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.