Correlation Between Pfizer and Fiplasto
Can any of the company-specific risk be diversified away by investing in both Pfizer and Fiplasto 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 Fiplasto into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pfizer Inc and Fiplasto SA, you can compare the effects of market volatilities on Pfizer and Fiplasto 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 Fiplasto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and Fiplasto.
Diversification Opportunities for Pfizer and Fiplasto
Good diversification
The 3 months correlation between Pfizer and Fiplasto is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and Fiplasto SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fiplasto 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 Fiplasto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fiplasto SA has no effect on the direction of Pfizer i.e., Pfizer and Fiplasto go up and down completely randomly.
Pair Corralation between Pfizer and Fiplasto
Assuming the 90 days trading horizon Pfizer is expected to generate 28.79 times less return on investment than Fiplasto. But when comparing it to its historical volatility, Pfizer Inc is 1.25 times less risky than Fiplasto. It trades about 0.01 of its potential returns per unit of risk. Fiplasto SA is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,840 in Fiplasto SA on September 3, 2024 and sell it today you would earn a total of 29,760 from holding Fiplasto SA or generate 1617.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pfizer Inc vs. Fiplasto SA
Performance |
| Timeline |
| Pfizer Inc |
| Fiplasto SA |
Pfizer and Fiplasto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pfizer and Fiplasto
The main advantage of trading using opposite Pfizer and Fiplasto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, Fiplasto 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 Fiplasto will offset losses from the drop in Fiplasto's long position.| Pfizer vs. Johnson Johnson Co | Pfizer vs. Merck Company | Pfizer vs. Longvie SA | Pfizer vs. United States Steel |
| Fiplasto vs. Longvie SA | Fiplasto vs. Edesa Holding SA | Fiplasto vs. American Express Co | Fiplasto vs. United States Steel |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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