Correlation Between Pfizer and CES Energy
Can any of the company-specific risk be diversified away by investing in both Pfizer and CES Energy 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 CES Energy 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 CES Energy Solutions, you can compare the effects of market volatilities on Pfizer and CES Energy 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 CES Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and CES Energy.
Diversification Opportunities for Pfizer and CES Energy
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Pfizer and CES is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc CDR and CES Energy Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CES Energy Solutions 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 CES Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CES Energy Solutions has no effect on the direction of Pfizer i.e., Pfizer and CES Energy go up and down completely randomly.
Pair Corralation between Pfizer and CES Energy
Assuming the 90 days trading horizon Pfizer Inc CDR is expected to under-perform the CES Energy. But the stock apears to be less risky and, when comparing its historical volatility, Pfizer Inc CDR is 1.8 times less risky than CES Energy. The stock trades about -0.22 of its potential returns per unit of risk. The CES Energy Solutions is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 744.00 in CES Energy Solutions on August 30, 2024 and sell it today you would earn a total of 205.00 from holding CES Energy Solutions or generate 27.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pfizer Inc CDR vs. CES Energy Solutions
Performance |
| Timeline |
| Pfizer Inc CDR |
| CES Energy Solutions |
Pfizer and CES Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pfizer and CES Energy
The main advantage of trading using opposite Pfizer and CES Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, CES Energy 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 CES Energy will offset losses from the drop in CES Energy's long position.| Pfizer vs. Decibel Cannabis | Pfizer vs. Cannara Biotech | Pfizer vs. iShares Canadian HYBrid | Pfizer vs. Altagas Cum Red |
| CES Energy vs. Secure Energy Services | CES Energy vs. Ensign Energy Services | CES Energy vs. Kelt Exploration | CES Energy vs. Trican Well Service |
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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