Correlation Between Sociedad Comercial and Pfizer

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

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

Diversification Opportunities for Sociedad Comercial and Pfizer

0.62

Correlation Coefficient

Sociedad Comercial  Pfizer

Poor diversification

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

Pair Corralation between Sociedad Comercial and Pfizer

Assuming the 90 days trading horizon Sociedad Comercial del is expected to generate 1.65 times more return on investment than Pfizer. However, Sociedad Comercial is 1.65 times more volatile than Pfizer Inc. It trades about -0.07 of its potential returns per unit of risk. Pfizer Inc is currently generating about -0.3 per unit of risk. If you would invest  28,050  in Sociedad Comercial del on September 15, 2024 and sell it today you would lose (3,500) from holding Sociedad Comercial del or give up 12.48% of portfolio value over 90 days.

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

Sociedad Comercial del  vs.  Pfizer Inc

Sociedad Comercial del

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sociedad Comercial del has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pfizer Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pfizer Inc 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 technical and fundamental indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Sociedad Comercial and Pfizer

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

The idea behind Sociedad Comercial del and Pfizer Inc 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.