Correlation Between Electra Battery and Pfizer
Can any of the company-specific risk be diversified away by investing in both Electra Battery 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 Electra Battery and Pfizer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electra Battery Materials and Pfizer Inc CDR, you can compare the effects of market volatilities on Electra Battery 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 Electra Battery with a short position of Pfizer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electra Battery and Pfizer.
Diversification Opportunities for Electra Battery and Pfizer
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Electra and Pfizer is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Electra Battery Materials 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 Electra Battery 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 Electra Battery Materials 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 Electra Battery i.e., Electra Battery and Pfizer go up and down completely randomly.
Pair Corralation between Electra Battery and Pfizer
Assuming the 90 days trading horizon Electra Battery Materials is expected to under-perform the Pfizer. In addition to that, Electra Battery is 4.46 times more volatile than Pfizer Inc CDR. It trades about -0.02 of its total potential returns per unit of risk. Pfizer Inc CDR is currently generating about -0.07 per unit of volatility. If you would invest 2,135 in Pfizer Inc CDR on September 26, 2024 and sell it today you would lose (895.00) from holding Pfizer Inc CDR or give up 41.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electra Battery Materials vs. Pfizer Inc CDR
Performance |
| Timeline |
| Electra Battery Materials |
| Pfizer Inc CDR |
Electra Battery and Pfizer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electra Battery and Pfizer
The main advantage of trading using opposite Electra Battery and Pfizer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electra Battery 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.| Electra Battery vs. Monarca Minerals | Electra Battery vs. Outcrop Gold Corp | Electra Battery vs. Grande Portage Resources | Electra Battery vs. Klondike Silver Corp |
| Pfizer vs. TGS Esports | Pfizer vs. NextSource Materials | Pfizer vs. QC Copper and | Pfizer vs. Electra Battery Materials |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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