Correlation Between Pfizer and Total Energy
Can any of the company-specific risk be diversified away by investing in both Pfizer and Total 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 Total 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 Total Energy Services, you can compare the effects of market volatilities on Pfizer and Total 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 Total Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and Total Energy.
Diversification Opportunities for Pfizer and Total Energy
-0.93 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Pfizer and Total is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc CDR and Total Energy Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Total Energy Services 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 Total Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Total Energy Services has no effect on the direction of Pfizer i.e., Pfizer and Total Energy go up and down completely randomly.
Pair Corralation between Pfizer and Total Energy
Assuming the 90 days trading horizon Pfizer Inc CDR is expected to under-perform the Total Energy. In addition to that, Pfizer is 1.06 times more volatile than Total Energy Services. It trades about -0.17 of its total potential returns per unit of risk. Total Energy Services is currently generating about 0.57 per unit of volatility. If you would invest 962.00 in Total Energy Services on September 1, 2024 and sell it today you would earn a total of 206.00 from holding Total Energy Services or generate 21.41% 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. Total Energy Services
Performance |
| Timeline |
| Pfizer Inc CDR |
| Total Energy Services |
Pfizer and Total Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pfizer and Total Energy
The main advantage of trading using opposite Pfizer and Total Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, Total 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 Total Energy will offset losses from the drop in Total Energy's long position.| Pfizer vs. Perseus Mining | Pfizer vs. MAG Silver Corp | Pfizer vs. Capstone Mining Corp | Pfizer vs. Boat Rocker Media |
| Total Energy vs. Trican Well Service | Total Energy vs. Calfrac Well Services | Total Energy vs. CES Energy Solutions |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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