Correlation Between Federal Home and Pfizer
Can any of the company-specific risk be diversified away by investing in both Federal Home 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 Federal Home and Pfizer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federal Home Loan and Pfizer Inc, you can compare the effects of market volatilities on Federal Home 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 Federal Home with a short position of Pfizer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federal Home and Pfizer.
Diversification Opportunities for Federal Home and Pfizer
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Federal and Pfizer is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Federal Home Loan and Pfizer Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pfizer Inc and Federal Home 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 Federal Home Loan 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 Federal Home i.e., Federal Home and Pfizer go up and down completely randomly.
Pair Corralation between Federal Home and Pfizer
Assuming the 90 days horizon Federal Home Loan is expected to generate 5.74 times more return on investment than Pfizer. However, Federal Home is 5.74 times more volatile than Pfizer Inc. It trades about 0.53 of its potential returns per unit of risk. Pfizer Inc is currently generating about -0.14 per unit of risk. If you would invest 124.00 in Federal Home Loan on August 30, 2024 and sell it today you would earn a total of 214.00 from holding Federal Home Loan or generate 172.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Federal Home Loan vs. Pfizer Inc
Performance |
| Timeline |
| Federal Home Loan |
| Pfizer Inc |
Federal Home and Pfizer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federal Home and Pfizer
The main advantage of trading using opposite Federal Home and Pfizer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federal Home 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.| Federal Home vs. Superior Plus Corp | Federal Home vs. NMI Holdings | Federal Home vs. SIVERS SEMICONDUCTORS AB | Federal Home vs. Talanx AG |
| Pfizer vs. International Consolidated Airlines | Pfizer vs. SMA Solar Technology | Pfizer vs. Nok Airlines PCL | Pfizer vs. Vishay Intertechnology |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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