Correlation Between Otsuka Holdings and Pfizer
Can any of the company-specific risk be diversified away by investing in both Otsuka Holdings 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 Otsuka Holdings and Pfizer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Otsuka Holdings Co and Pfizer Inc, you can compare the effects of market volatilities on Otsuka Holdings 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 Otsuka Holdings with a short position of Pfizer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Otsuka Holdings and Pfizer.
Diversification Opportunities for Otsuka Holdings and Pfizer
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Otsuka and Pfizer is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Otsuka Holdings Co and Pfizer Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pfizer Inc and Otsuka Holdings 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 Otsuka Holdings Co 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 Otsuka Holdings i.e., Otsuka Holdings and Pfizer go up and down completely randomly.
Pair Corralation between Otsuka Holdings and Pfizer
Assuming the 90 days horizon Otsuka Holdings Co is expected to generate 1.0 times more return on investment than Pfizer. However, Otsuka Holdings Co is 1.0 times less risky than Pfizer. It trades about -0.03 of its potential returns per unit of risk. Pfizer Inc is currently generating about -0.28 per unit of risk. If you would invest 2,984 in Otsuka Holdings Co on August 24, 2024 and sell it today you would lose (40.00) from holding Otsuka Holdings Co or give up 1.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Otsuka Holdings Co vs. Pfizer Inc
Performance |
| Timeline |
| Otsuka Holdings |
| Pfizer Inc |
Otsuka Holdings and Pfizer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Otsuka Holdings and Pfizer
The main advantage of trading using opposite Otsuka Holdings and Pfizer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Otsuka Holdings 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.| Otsuka Holdings vs. Pfizer Inc | Otsuka Holdings vs. Astellas Pharma | Otsuka Holdings vs. Bristol Myers Squibb | Otsuka Holdings vs. Bayer AG |
| Pfizer vs. Merck Company | Pfizer vs. Johnson Johnson | Pfizer vs. Eshallgo Class A | Pfizer vs. Amtech Systems |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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