Correlation Between Pfizer and Applied Molecular
Can any of the company-specific risk be diversified away by investing in both Pfizer and Applied Molecular 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 Applied Molecular into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pfizer Inc and Applied Molecular Transport, you can compare the effects of market volatilities on Pfizer and Applied Molecular 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 Applied Molecular. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and Applied Molecular.
Diversification Opportunities for Pfizer and Applied Molecular
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pfizer and Applied is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and Applied Molecular Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied Molecular 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 Applied Molecular. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Applied Molecular has no effect on the direction of Pfizer i.e., Pfizer and Applied Molecular go up and down completely randomly.
Pair Corralation between Pfizer and Applied Molecular
Considering the 90-day investment horizon Pfizer Inc is expected to generate 0.16 times more return on investment than Applied Molecular. However, Pfizer Inc is 6.4 times less risky than Applied Molecular. It trades about -0.08 of its potential returns per unit of risk. Applied Molecular Transport is currently generating about -0.03 per unit of risk. If you would invest 4,668 in Pfizer Inc on August 29, 2024 and sell it today you would lose (2,091) from holding Pfizer Inc or give up 44.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 31.52% |
| Values | Daily Returns |
Pfizer Inc vs. Applied Molecular Transport
Performance |
| Timeline |
| Pfizer Inc |
| Applied Molecular |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Pfizer and Applied Molecular Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pfizer and Applied Molecular
The main advantage of trading using opposite Pfizer and Applied Molecular positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, Applied Molecular 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 Applied Molecular will offset losses from the drop in Applied Molecular's long position.| Pfizer vs. Capricor Therapeutics | Pfizer vs. Soleno Therapeutics | Pfizer vs. Bio Path Holdings | Pfizer vs. Moleculin Biotech |
| Applied Molecular vs. Aileron Therapeutics | Applied Molecular vs. Bio Path Holdings | Applied Molecular vs. Benitec Biopharma Ltd | Applied Molecular vs. Aerovate Therapeutics |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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