Correlation Between DENTSPLY SIRONA and Bread Financial

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

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

Diversification Opportunities for DENTSPLY SIRONA and Bread Financial

-0.62

Correlation Coefficient

DENTSPLY SIRONA  Bread Financial

Excellent diversification

The 3 months correlation between DENTSPLY and Bread is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding DENTSPLY SIRONA and Bread Financial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bread Financial Holdings 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 Bread Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bread Financial Holdings has no effect on the direction of DENTSPLY SIRONA i.e., DENTSPLY SIRONA and Bread Financial go up and down completely randomly.

Pair Corralation between DENTSPLY SIRONA and Bread Financial

Assuming the 90 days trading horizon DENTSPLY SIRONA is expected to under-perform the Bread Financial. In addition to that, DENTSPLY SIRONA is 1.91 times more volatile than Bread Financial Holdings. It trades about -0.12 of its total potential returns per unit of risk. Bread Financial Holdings is currently generating about 0.16 per unit of volatility. If you would invest  6,900  in Bread Financial Holdings on April 23, 2025 and sell it today you would earn a total of  1,715  from holding Bread Financial Holdings or generate 24.86% return on investment over 90 days.

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

DENTSPLY SIRONA  vs.  Bread Financial Holdings

DENTSPLY SIRONA

Risk-Adjusted Performance

Very Weak

Over the last 90 days DENTSPLY SIRONA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Bread Financial Holdings

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bread Financial Holdings are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak essential indicators, Bread Financial sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with DENTSPLY SIRONA and Bread Financial

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

The idea behind DENTSPLY SIRONA and Bread Financial Holdings 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.