Correlation Between Pfizer and BMTC
Can any of the company-specific risk be diversified away by investing in both Pfizer and BMTC 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 BMTC 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 BMTC Group, you can compare the effects of market volatilities on Pfizer and BMTC 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 BMTC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and BMTC.
Diversification Opportunities for Pfizer and BMTC
Excellent diversification
The 3 months correlation between Pfizer and BMTC is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc CDR and BMTC Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BMTC Group 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 BMTC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BMTC Group has no effect on the direction of Pfizer i.e., Pfizer and BMTC go up and down completely randomly.
Pair Corralation between Pfizer and BMTC
Assuming the 90 days trading horizon Pfizer Inc CDR is expected to under-perform the BMTC. In addition to that, Pfizer is 1.06 times more volatile than BMTC Group. It trades about -0.17 of its total potential returns per unit of risk. BMTC Group is currently generating about 0.13 per unit of volatility. If you would invest 1,265 in BMTC Group on September 1, 2024 and sell it today you would earn a total of 54.00 from holding BMTC Group or generate 4.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pfizer Inc CDR vs. BMTC Group
Performance |
| Timeline |
| Pfizer Inc CDR |
| BMTC Group |
Pfizer and BMTC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pfizer and BMTC
The main advantage of trading using opposite Pfizer and BMTC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, BMTC 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 BMTC will offset losses from the drop in BMTC's long position.| Pfizer vs. Perseus Mining | Pfizer vs. MAG Silver Corp | Pfizer vs. Capstone Mining Corp | Pfizer vs. Boat Rocker Media |
| BMTC vs. Leons Furniture Limited | BMTC vs. Lassonde Industries | BMTC vs. TWC Enterprises | BMTC vs. Supremex |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |