Correlation Between Pfizer and Banco Macro
Can any of the company-specific risk be diversified away by investing in both Pfizer and Banco Macro 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 Pfizer and Banco Macro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pfizer Inc and Banco Macro SA, you can compare the effects of market volatilities on Pfizer and Banco Macro 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 Pfizer with a short position of Banco Macro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and Banco Macro.
Diversification Opportunities for Pfizer and Banco Macro
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Pfizer and Banco is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and Banco Macro SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Macro SA and Pfizer 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 Pfizer Inc are associated (or correlated) with Banco Macro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco Macro SA has no effect on the direction of Pfizer i.e., Pfizer and Banco Macro go up and down completely randomly.
Pair Corralation between Pfizer and Banco Macro
Assuming the 90 days trading horizon Pfizer is expected to generate 23.22 times less return on investment than Banco Macro. But when comparing it to its historical volatility, Pfizer Inc is 1.5 times less risky than Banco Macro. It trades about 0.01 of its potential returns per unit of risk. Banco Macro SA is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 424,025 in Banco Macro SA on August 27, 2024 and sell it today you would earn a total of 475,975 from holding Banco Macro SA or generate 112.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pfizer Inc vs. Banco Macro SA
Performance |
| Timeline |
| Pfizer Inc |
| Banco Macro SA |
Pfizer and Banco Macro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pfizer and Banco Macro
The main advantage of trading using opposite Pfizer and Banco Macro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, Banco Macro 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 Banco Macro will offset losses from the drop in Banco Macro's long position.The idea behind Pfizer Inc and Banco Macro SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Banco Macro vs. Edesa Holding SA | Banco Macro vs. American Express Co | Banco Macro vs. United States Steel | Banco Macro vs. Capex SA |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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