Correlation Between Amicus Therapeutics and Pfizer
Can any of the company-specific risk be diversified away by investing in both Amicus Therapeutics 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 Amicus Therapeutics and Pfizer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amicus Therapeutics and Pfizer Inc, you can compare the effects of market volatilities on Amicus Therapeutics 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 Amicus Therapeutics with a short position of Pfizer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amicus Therapeutics and Pfizer.
Diversification Opportunities for Amicus Therapeutics and Pfizer
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Amicus and Pfizer is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Amicus Therapeutics and Pfizer Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pfizer Inc and Amicus Therapeutics 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 Amicus Therapeutics 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 Amicus Therapeutics i.e., Amicus Therapeutics and Pfizer go up and down completely randomly.
Pair Corralation between Amicus Therapeutics and Pfizer
Given the investment horizon of 90 days Amicus Therapeutics is expected to under-perform the Pfizer. In addition to that, Amicus Therapeutics is 1.78 times more volatile than Pfizer Inc. It trades about -0.08 of its total potential returns per unit of risk. Pfizer Inc is currently generating about -0.06 per unit of volatility. If you would invest 2,787 in Pfizer Inc on September 3, 2024 and sell it today you would lose (166.00) from holding Pfizer Inc or give up 5.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amicus Therapeutics vs. Pfizer Inc
Performance |
| Timeline |
| Amicus Therapeutics |
| Pfizer Inc |
Amicus Therapeutics and Pfizer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amicus Therapeutics and Pfizer
The main advantage of trading using opposite Amicus Therapeutics and Pfizer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amicus Therapeutics 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.| Amicus Therapeutics vs. Incyte | Amicus Therapeutics vs. Denali Therapeutics | Amicus Therapeutics vs. argenx NV ADR | Amicus Therapeutics vs. Harmony Biosciences Holdings |
| Pfizer vs. Merck Company | Pfizer vs. Johnson Johnson | Pfizer vs. Highway Holdings Limited | Pfizer vs. QCR Holdings |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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