Correlation Between Metrogas and Pfizer
Can any of the company-specific risk be diversified away by investing in both Metrogas 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 Metrogas and Pfizer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metrogas SA and Pfizer Inc, you can compare the effects of market volatilities on Metrogas 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 Metrogas with a short position of Pfizer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metrogas and Pfizer.
Diversification Opportunities for Metrogas and Pfizer
Pay attention - limited upside
The 3 months correlation between Metrogas and Pfizer is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding Metrogas SA and Pfizer Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pfizer Inc and Metrogas 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 Metrogas SA 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 Metrogas i.e., Metrogas and Pfizer go up and down completely randomly.
Pair Corralation between Metrogas and Pfizer
Assuming the 90 days trading horizon Metrogas SA is expected to generate 1.76 times more return on investment than Pfizer. However, Metrogas is 1.76 times more volatile than Pfizer Inc. It trades about 0.41 of its potential returns per unit of risk. Pfizer Inc is currently generating about -0.25 per unit of risk. If you would invest 112,000 in Metrogas SA on August 30, 2024 and sell it today you would earn a total of 109,500 from holding Metrogas SA or generate 97.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metrogas SA vs. Pfizer Inc
Performance |
| Timeline |
| Metrogas SA |
| Pfizer Inc |
Metrogas and Pfizer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metrogas and Pfizer
The main advantage of trading using opposite Metrogas and Pfizer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metrogas 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.| Metrogas vs. Pfizer Inc | Metrogas vs. Instituto Rosenbusch SA | Metrogas vs. Sociedad Comercial del | Metrogas vs. Ledesma SAAI |
| Pfizer vs. Harmony Gold Mining | Pfizer vs. Agrometal SAI | Pfizer vs. United States Steel | Pfizer vs. Telecom Argentina |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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