Correlation Between Stryker Corp and Dentsply Sirona

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Can any of the company-specific risk be diversified away by investing in both Stryker Corp 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 Stryker Corp and Dentsply Sirona into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stryker Corp and Dentsply Sirona, you can compare the effects of market volatilities on Stryker Corp 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 Stryker Corp with a short position of Dentsply Sirona. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stryker Corp and Dentsply Sirona.

Diversification Opportunities for Stryker Corp and Dentsply Sirona

0.88
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Stryker and Dentsply is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Stryker Corp and Dentsply Sirona in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dentsply Sirona and Stryker Corp 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 Stryker Corp 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 Stryker Corp i.e., Stryker Corp and Dentsply Sirona go up and down completely randomly.

Pair Corralation between Stryker Corp and Dentsply Sirona

Considering the 90-day investment horizon Stryker Corp is expected to under-perform the Dentsply Sirona. But the stock apears to be less risky and, when comparing its historical volatility, Stryker Corp is 1.31 times less risky than Dentsply Sirona. The stock trades about -0.21 of its potential returns per unit of risk. The Dentsply Sirona is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest  3,951  in Dentsply Sirona on April 1, 2022 and sell it today you would lose (378.00)  from holding Dentsply Sirona or give up 9.57% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Stryker Corp  vs.  Dentsply Sirona

 Performance (%) 
      Timeline 
Stryker Corp 
Stryker Performance
0 of 100
Over the last 90 days Stryker Corp 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 fairly strong which may send shares a bit higher in July 2022. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0141
Payout Ratio
0.3
Last Split Factor
2:1
Forward Annual Dividend Rate
2.78
Dividend Date
2022-07-29
Ex Dividend Date
2022-06-29
Last Split Date
2004-05-17

Stryker Price Channel

Dentsply Sirona 
Dentsply Performance
0 of 100
Over the last 90 days Dentsply Sirona has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in July 2022. The current disturbance may also be a sign of long term up-swing for the company investors.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0137
Payout Ratio
0.18
Last Split Factor
2:1
Forward Annual Dividend Rate
0.5
Dividend Date
2022-07-08
Ex Dividend Date
2022-06-23
Last Split Date
2006-07-18

Dentsply Price Channel

Stryker Corp and Dentsply Sirona Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Stryker Corp and Dentsply Sirona

The main advantage of trading using opposite Stryker Corp and Dentsply Sirona positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stryker Corp 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 Stryker Corp 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .

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