Correlation Between Collegium Pharmaceutical and Pfizer
Can any of the company-specific risk be diversified away by investing in both Collegium Pharmaceutical 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 Collegium Pharmaceutical and Pfizer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Collegium Pharmaceutical and Pfizer Inc, you can compare the effects of market volatilities on Collegium Pharmaceutical 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 Collegium Pharmaceutical with a short position of Pfizer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Collegium Pharmaceutical and Pfizer.
Diversification Opportunities for Collegium Pharmaceutical and Pfizer
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Collegium and Pfizer is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Collegium Pharmaceutical and Pfizer Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pfizer Inc and Collegium Pharmaceutical 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 Collegium Pharmaceutical 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 has no effect on the direction of Collegium Pharmaceutical i.e., Collegium Pharmaceutical and Pfizer go up and down completely randomly.
Pair Corralation between Collegium Pharmaceutical and Pfizer
Given the investment horizon of 90 days Collegium Pharmaceutical is expected to generate 3.01 times more return on investment than Pfizer. However, Collegium Pharmaceutical is 3.01 times more volatile than Pfizer Inc. It trades about 0.12 of its potential returns per unit of risk. Pfizer Inc is currently generating about 0.02 per unit of risk. If you would invest 2,862 in Collegium Pharmaceutical on November 6, 2024 and sell it today you would earn a total of 231.00 from holding Collegium Pharmaceutical or generate 8.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Collegium Pharmaceutical vs. Pfizer Inc
Performance |
| Timeline |
| Collegium Pharmaceutical |
| Pfizer Inc |
Collegium Pharmaceutical and Pfizer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Collegium Pharmaceutical and Pfizer
The main advantage of trading using opposite Collegium Pharmaceutical and Pfizer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Collegium Pharmaceutical 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.| Collegium Pharmaceutical vs. Phibro Animal Health | Collegium Pharmaceutical vs. ANI Pharmaceuticals | Collegium Pharmaceutical vs. Procaps Group SA | Collegium Pharmaceutical vs. Amphastar P |
| Pfizer vs. Agilent Technologies | Pfizer vs. Equillium | Pfizer vs. 23Andme Holding Co | Pfizer vs. DiaMedica Therapeutics |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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