Correlation Between Pfizer and Auxly Cannabis
Can any of the company-specific risk be diversified away by investing in both Pfizer and Auxly Cannabis 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 Auxly Cannabis 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 Auxly Cannabis Group, you can compare the effects of market volatilities on Pfizer and Auxly Cannabis 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 Auxly Cannabis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and Auxly Cannabis.
Diversification Opportunities for Pfizer and Auxly Cannabis
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Pfizer and Auxly is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc CDR and Auxly Cannabis Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auxly Cannabis 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 Auxly Cannabis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auxly Cannabis Group has no effect on the direction of Pfizer i.e., Pfizer and Auxly Cannabis go up and down completely randomly.
Pair Corralation between Pfizer and Auxly Cannabis
Assuming the 90 days trading horizon Pfizer Inc CDR is expected to under-perform the Auxly Cannabis. But the stock apears to be less risky and, when comparing its historical volatility, Pfizer Inc CDR is 5.72 times less risky than Auxly Cannabis. The stock trades about -0.21 of its potential returns per unit of risk. The Auxly Cannabis Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 4.00 in Auxly Cannabis Group on August 31, 2024 and sell it today you would earn a total of 0.00 from holding Auxly Cannabis Group or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pfizer Inc CDR vs. Auxly Cannabis Group
Performance |
| Timeline |
| Pfizer Inc CDR |
| Auxly Cannabis Group |
Pfizer and Auxly Cannabis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pfizer and Auxly Cannabis
The main advantage of trading using opposite Pfizer and Auxly Cannabis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, Auxly Cannabis 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 Auxly Cannabis will offset losses from the drop in Auxly Cannabis' long position.| Pfizer vs. Stampede Drilling | Pfizer vs. Constellation Software | Pfizer vs. Major Drilling Group | Pfizer vs. Slate Grocery REIT |
| Auxly Cannabis vs. iShares Canadian HYBrid | Auxly Cannabis vs. Brompton European Dividend | Auxly Cannabis vs. Solar Alliance Energy | Auxly Cannabis vs. PHN Multi Style All Cap |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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