Correlation Between Pfizer and 156700BD7

Can any of the company-specific risk be diversified away by investing in both Pfizer and 156700BD7 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 156700BD7 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Pfizer Inc and US156700BD72, you can compare the effects of market volatilities on Pfizer and 156700BD7 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 156700BD7. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and 156700BD7.

Diversification Opportunities for Pfizer and 156700BD7

-0.37

Correlation Coefficient

Pfizer  156700BD7

Very good diversification

The 3 months correlation between Pfizer and 156700BD7 is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and US156700BD72 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US156700BD72 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 156700BD7. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US156700BD72 has no effect on the direction of Pfizer i.e., Pfizer and 156700BD7 go up and down completely randomly.

Pair Corralation between Pfizer and 156700BD7

Considering the 90-day investment horizon Pfizer Inc is expected to generate 0.18 times more return on investment than 156700BD7. However, Pfizer Inc is 5.63 times less risky than 156700BD7. It trades about -0.16 of its potential returns per unit of risk. US156700BD72 is currently generating about -0.05 per unit of risk. If you would invest  2,961  in Pfizer Inc on September 16, 2024 and sell it today you would lose (403.00) from holding Pfizer Inc or give up 13.61% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	86.15%
Values	Daily Returns

Pfizer Inc  vs.  US156700BD72

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 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.

US156700BD72

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days US156700BD72 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Bond's basic 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 US156700BD72 investors.

Pair Trading with Pfizer and 156700BD7

The main advantage of trading using opposite Pfizer and 156700BD7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, 156700BD7 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 156700BD7 will offset losses from the drop in 156700BD7's long position.

The idea behind Pfizer Inc and US156700BD72 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.