Correlation Between Pfizer and Birchtech Corp
Can any of the company-specific risk be diversified away by investing in both Pfizer and Birchtech Corp 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 Birchtech Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pfizer Inc CDR and Birchtech Corp, you can compare the effects of market volatilities on Pfizer and Birchtech Corp 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 Birchtech Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and Birchtech Corp.
Diversification Opportunities for Pfizer and Birchtech Corp
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Pfizer and Birchtech is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc CDR and Birchtech Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Birchtech Corp 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 CDR are associated (or correlated) with Birchtech Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Birchtech Corp has no effect on the direction of Pfizer i.e., Pfizer and Birchtech Corp go up and down completely randomly.
Pair Corralation between Pfizer and Birchtech Corp
Assuming the 90 days trading horizon Pfizer Inc CDR is expected to generate 0.39 times more return on investment than Birchtech Corp. However, Pfizer Inc CDR is 2.54 times less risky than Birchtech Corp. It trades about -0.22 of its potential returns per unit of risk. Birchtech Corp is currently generating about -0.14 per unit of risk. If you would invest 1,307 in Pfizer Inc CDR on August 30, 2024 and sell it today you would lose (106.00) from holding Pfizer Inc CDR or give up 8.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 65.22% |
| Values | Daily Returns |
Pfizer Inc CDR vs. Birchtech Corp
Performance |
| Timeline |
| Pfizer Inc CDR |
| Birchtech Corp |
Pfizer and Birchtech Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pfizer and Birchtech Corp
The main advantage of trading using opposite Pfizer and Birchtech Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, Birchtech Corp 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 Birchtech Corp will offset losses from the drop in Birchtech Corp's long position.| Pfizer vs. Decibel Cannabis | Pfizer vs. Cannara Biotech | Pfizer vs. iShares Canadian HYBrid | Pfizer vs. Altagas Cum Red |
| Birchtech Corp vs. Slate Grocery REIT | Birchtech Corp vs. SalesforceCom CDR | Birchtech Corp vs. iSign Media Solutions | Birchtech Corp vs. Plaza Retail REIT |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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