Correlation Between Pfizer and Sterling Check

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

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

Diversification Opportunities for Pfizer and Sterling Check

-0.79

Correlation Coefficient

Pfizer  Sterling Check

Pay attention - limited upside

The 3 months correlation between Pfizer and Sterling is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and Sterling Check Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Check Corp 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 Sterling Check. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sterling Check Corp has no effect on the direction of Pfizer i.e., Pfizer and Sterling Check go up and down completely randomly.

Pair Corralation between Pfizer and Sterling Check

Considering the 90-day investment horizon Pfizer Inc is expected to under-perform the Sterling Check. In addition to that, Pfizer is 1.35 times more volatile than Sterling Check Corp. It trades about -0.09 of its total potential returns per unit of risk. Sterling Check Corp is currently generating about -0.02 per unit of volatility. If you would invest  1,687  in Sterling Check Corp on September 20, 2024 and sell it today you would lose (13.00) from holding Sterling Check Corp or give up 0.77% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	47.62%
Values	Daily Returns

Pfizer Inc  vs.  Sterling Check Corp

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.

Sterling Check Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sterling Check Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, Sterling Check is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Pfizer and Sterling Check

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

The idea behind Pfizer Inc and Sterling Check Corp 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.