Correlation Between Pfizer and Cowen

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

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

Diversification Opportunities for Pfizer and Cowen

-0.73

Correlation Coefficient

Pfizer  Cowen

Pay attention - limited upside

The 3 months correlation between Pfizer and Cowen is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and Cowen Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cowen Group 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 are associated (or correlated) with Cowen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cowen Group has no effect on the direction of Pfizer i.e., Pfizer and Cowen go up and down completely randomly.

Pair Corralation between Pfizer and Cowen

If you would invest  3,899  in Cowen Group on September 20, 2024 and sell it today you would earn a total of  0.00  from holding Cowen Group or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	1.59%
Values	Daily Returns

Pfizer Inc  vs.  Cowen Group

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. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Cowen Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cowen Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Cowen is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Pfizer and Cowen

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

The idea behind Pfizer Inc and Cowen 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.