Correlation Between Pfizer and Olympia Financial

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

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

Diversification Opportunities for Pfizer and Olympia Financial

-0.74

Correlation Coefficient

Pfizer  Olympia Financial

Pay attention - limited upside

The 3 months correlation between Pfizer and Olympia is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc CDR and Olympia Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Olympia Financial and Pfizer 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 Pfizer Inc CDR are associated (or correlated) with Olympia Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Olympia Financial has no effect on the direction of Pfizer i.e., Pfizer and Olympia Financial go up and down completely randomly.

Pair Corralation between Pfizer and Olympia Financial

Assuming the 90 days trading horizon Pfizer Inc CDR is expected to under-perform the Olympia Financial. In addition to that, Pfizer is 1.23 times more volatile than Olympia Financial Group. It trades about -0.09 of its total potential returns per unit of risk. Olympia Financial Group is currently generating about 0.11 per unit of volatility. If you would invest  9,828  in Olympia Financial Group on September 23, 2024 and sell it today you would earn a total of  822.00  from holding Olympia Financial Group or generate 8.36% return on investment over 90 days.

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

Pfizer Inc CDR  vs.  Olympia Financial Group

Pfizer Inc CDR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pfizer Inc CDR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Olympia Financial

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Olympia Financial Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Olympia Financial may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Pfizer and Olympia Financial

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

The idea behind Pfizer Inc CDR and Olympia Financial Group 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.