Correlation Between Birchtech Corp and Pfizer
Can any of the company-specific risk be diversified away by investing in both Birchtech Corp and Pfizer 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 Birchtech Corp and Pfizer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Birchtech Corp and Pfizer Inc CDR, you can compare the effects of market volatilities on Birchtech Corp and Pfizer 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 Birchtech Corp with a short position of Pfizer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Birchtech Corp and Pfizer.
Diversification Opportunities for Birchtech Corp and Pfizer
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Birchtech and Pfizer is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Birchtech Corp and Pfizer Inc CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pfizer Inc CDR and Birchtech Corp 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 Birchtech Corp are associated (or correlated) with Pfizer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pfizer Inc CDR has no effect on the direction of Birchtech Corp i.e., Birchtech Corp and Pfizer go up and down completely randomly.
Pair Corralation between Birchtech Corp and Pfizer
Assuming the 90 days trading horizon Birchtech Corp is expected to under-perform the Pfizer. In addition to that, Birchtech Corp is 2.75 times more volatile than Pfizer Inc CDR. It trades about -0.14 of its total potential returns per unit of risk. Pfizer Inc CDR is currently generating about -0.08 per unit of volatility. If you would invest 2,225 in Pfizer Inc CDR on August 30, 2024 and sell it today you would lose (1,024) from holding Pfizer Inc CDR or give up 46.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 3.04% |
| Values | Daily Returns |
Birchtech Corp vs. Pfizer Inc CDR
Performance |
| Timeline |
| Birchtech Corp |
| Pfizer Inc CDR |
Birchtech Corp and Pfizer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Birchtech Corp and Pfizer
The main advantage of trading using opposite Birchtech Corp and Pfizer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Birchtech Corp position performs unexpectedly, Pfizer 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 Pfizer will offset losses from the drop in Pfizer's long position.| Birchtech Corp vs. Apple Inc CDR | Birchtech Corp vs. NVIDIA CDR | Birchtech Corp vs. Microsoft Corp CDR | Birchtech Corp vs. Amazon CDR |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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