Correlation Between Pfizer and ACADIA Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Pfizer and ACADIA Pharmaceuticals 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 ACADIA Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pfizer Inc and ACADIA Pharmaceuticals, you can compare the effects of market volatilities on Pfizer and ACADIA Pharmaceuticals 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 ACADIA Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and ACADIA Pharmaceuticals.
Diversification Opportunities for Pfizer and ACADIA Pharmaceuticals
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pfizer and ACADIA is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and ACADIA Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACADIA Pharmaceuticals 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 are associated (or correlated) with ACADIA Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACADIA Pharmaceuticals has no effect on the direction of Pfizer i.e., Pfizer and ACADIA Pharmaceuticals go up and down completely randomly.
Pair Corralation between Pfizer and ACADIA Pharmaceuticals
Considering the 90-day investment horizon Pfizer Inc is expected to under-perform the ACADIA Pharmaceuticals. But the stock apears to be less risky and, when comparing its historical volatility, Pfizer Inc is 1.8 times less risky than ACADIA Pharmaceuticals. The stock trades about -0.23 of its potential returns per unit of risk. The ACADIA Pharmaceuticals is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 1,474 in ACADIA Pharmaceuticals on August 28, 2024 and sell it today you would earn a total of 180.00 from holding ACADIA Pharmaceuticals or generate 12.21% 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 vs. ACADIA Pharmaceuticals
Performance |
| Timeline |
| Pfizer Inc |
| ACADIA Pharmaceuticals |
Pfizer and ACADIA Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pfizer and ACADIA Pharmaceuticals
The main advantage of trading using opposite Pfizer and ACADIA Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, ACADIA Pharmaceuticals 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 ACADIA Pharmaceuticals will offset losses from the drop in ACADIA Pharmaceuticals' long position.| Pfizer vs. Capricor Therapeutics | Pfizer vs. Soleno Therapeutics | Pfizer vs. Bio Path Holdings | Pfizer vs. Moleculin Biotech |
| ACADIA Pharmaceuticals vs. Madrigal Pharmaceuticals | ACADIA Pharmaceuticals vs. Viking Therapeutics | ACADIA Pharmaceuticals vs. Sarepta Therapeutics | ACADIA Pharmaceuticals vs. Hepion Pharmaceuticals |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |