Correlation Between DENTSPLY SIRONA and Paycom Software

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

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

Diversification Opportunities for DENTSPLY SIRONA and Paycom Software

0.14

Correlation Coefficient

DENTSPLY SIRONA  Paycom Software

Average diversification

The 3 months correlation between DENTSPLY and Paycom is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding DENTSPLY SIRONA and Paycom Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paycom Software 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 Paycom Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paycom Software has no effect on the direction of DENTSPLY SIRONA i.e., DENTSPLY SIRONA and Paycom Software go up and down completely randomly.

Pair Corralation between DENTSPLY SIRONA and Paycom Software

Assuming the 90 days trading horizon DENTSPLY SIRONA is expected to under-perform the Paycom Software. In addition to that, DENTSPLY SIRONA is 1.87 times more volatile than Paycom Software. It trades about -0.12 of its total potential returns per unit of risk. Paycom Software is currently generating about 0.02 per unit of volatility. If you would invest  4,196  in Paycom Software on April 24, 2025 and sell it today you would earn a total of  59.00  from holding Paycom Software or generate 1.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

DENTSPLY SIRONA  vs.  Paycom Software

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.

Paycom Software

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Paycom Software are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Paycom Software is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with DENTSPLY SIRONA and Paycom Software

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

The idea behind DENTSPLY SIRONA and Paycom Software 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 Global Correlations module to find global opportunities by holding instruments from different markets.