Correlation Between Pfizer and Salesforce
Can any of the company-specific risk be diversified away by investing in both Pfizer and Salesforce 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 Salesforce 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 SalesforceCom CDR, you can compare the effects of market volatilities on Pfizer and Salesforce 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 Salesforce. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and Salesforce.
Diversification Opportunities for Pfizer and Salesforce
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Pfizer and Salesforce is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc CDR and SalesforceCom CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SalesforceCom CDR 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 Salesforce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SalesforceCom CDR has no effect on the direction of Pfizer i.e., Pfizer and Salesforce go up and down completely randomly.
Pair Corralation between Pfizer and Salesforce
Assuming the 90 days trading horizon Pfizer Inc CDR is expected to under-perform the Salesforce. But the stock apears to be less risky and, when comparing its historical volatility, Pfizer Inc CDR is 1.34 times less risky than Salesforce. The stock trades about -0.17 of its potential returns per unit of risk. The SalesforceCom CDR is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 2,327 in SalesforceCom CDR on September 1, 2024 and sell it today you would earn a total of 304.00 from holding SalesforceCom CDR or generate 13.06% 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. SalesforceCom CDR
Performance |
| Timeline |
| Pfizer Inc CDR |
| SalesforceCom CDR |
Pfizer and Salesforce Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pfizer and Salesforce
The main advantage of trading using opposite Pfizer and Salesforce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, Salesforce 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 Salesforce will offset losses from the drop in Salesforce's long position.| Pfizer vs. Perseus Mining | Pfizer vs. MAG Silver Corp | Pfizer vs. Capstone Mining Corp | Pfizer vs. Boat Rocker Media |
| Salesforce vs. Computer Modelling Group | Salesforce vs. Bird Construction | Salesforce vs. Hemisphere Energy | Salesforce vs. Champion Gaming Group |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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