Correlation Between Molinos Agro and Pfizer
Can any of the company-specific risk be diversified away by investing in both Molinos Agro 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 Molinos Agro and Pfizer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Molinos Agro SA and Pfizer Inc, you can compare the effects of market volatilities on Molinos Agro 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 Molinos Agro with a short position of Pfizer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molinos Agro and Pfizer.
Diversification Opportunities for Molinos Agro and Pfizer
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Molinos and Pfizer is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Molinos Agro SA and Pfizer Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pfizer Inc and Molinos Agro 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 Molinos Agro 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 Molinos Agro i.e., Molinos Agro and Pfizer go up and down completely randomly.
Pair Corralation between Molinos Agro and Pfizer
Assuming the 90 days trading horizon Molinos Agro SA is expected to generate 1.43 times more return on investment than Pfizer. However, Molinos Agro is 1.43 times more volatile than Pfizer Inc. It trades about 0.11 of its potential returns per unit of risk. Pfizer Inc is currently generating about -0.27 per unit of risk. If you would invest 1,867,500 in Molinos Agro SA on August 31, 2024 and sell it today you would earn a total of 287,500 from holding Molinos Agro SA or generate 15.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Molinos Agro SA vs. Pfizer Inc
Performance |
| Timeline |
| Molinos Agro SA |
| Pfizer Inc |
Molinos Agro and Pfizer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Molinos Agro and Pfizer
The main advantage of trading using opposite Molinos Agro and Pfizer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molinos Agro 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.| Molinos Agro vs. Harmony Gold Mining | Molinos Agro vs. Compania de Transporte | Molinos Agro vs. United States Steel | Molinos Agro vs. Transportadora de Gas |
| 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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