Correlation Between Pfizer and MiMedx

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

Diversification Opportunities for Pfizer and MiMedx

-0.93
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Pfizer and MiMedx is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and MiMedx Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MiMedx 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 MiMedx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MiMedx Group has no effect on the direction of Pfizer i.e., Pfizer and MiMedx go up and down completely randomly.

Pair Corralation between Pfizer and MiMedx

Considering the 90-day investment horizon Pfizer Inc is expected to under-perform the MiMedx. But the stock apears to be less risky and, when comparing its historical volatility, Pfizer Inc is 3.06 times less risky than MiMedx. The stock trades about -0.16 of its potential returns per unit of risk. The MiMedx Group is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  618.00  in MiMedx Group on September 18, 2024 and sell it today you would earn a total of  298.00  from holding MiMedx Group or generate 48.22% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Pfizer Inc  vs.  MiMedx Group

 Performance 
       Timeline  
Pfizer Inc 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.
MiMedx Group 

Risk-Adjusted Performance

13 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in MiMedx Group are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, MiMedx reported solid returns over the last few months and may actually be approaching a breakup point.

Pfizer and MiMedx Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Pfizer and MiMedx

The main advantage of trading using opposite Pfizer and MiMedx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, MiMedx 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 MiMedx will offset losses from the drop in MiMedx's long position.
The idea behind Pfizer Inc and MiMedx 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.
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 the Global Correlations module to find global opportunities by holding instruments from different markets.

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