Correlation Between Pfizer and Aurinia Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Pfizer and Aurinia 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 Aurinia 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 Aurinia Pharmaceuticals, you can compare the effects of market volatilities on Pfizer and Aurinia 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 Aurinia Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and Aurinia Pharmaceuticals.
Diversification Opportunities for Pfizer and Aurinia Pharmaceuticals
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Pfizer and Aurinia is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and Aurinia Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurinia 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 Aurinia Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurinia Pharmaceuticals has no effect on the direction of Pfizer i.e., Pfizer and Aurinia Pharmaceuticals go up and down completely randomly.
Pair Corralation between Pfizer and Aurinia Pharmaceuticals
Considering the 90-day investment horizon Pfizer Inc is expected to generate 0.54 times more return on investment than Aurinia Pharmaceuticals. However, Pfizer Inc is 1.86 times less risky than Aurinia Pharmaceuticals. It trades about 0.06 of its potential returns per unit of risk. Aurinia Pharmaceuticals is currently generating about -0.19 per unit of risk. If you would invest 2,618 in Pfizer Inc on November 3, 2024 and sell it today you would earn a total of 34.00 from holding Pfizer Inc or generate 1.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Pfizer Inc vs. Aurinia Pharmaceuticals
Performance |
| Timeline |
| Pfizer Inc |
| Aurinia Pharmaceuticals |
Pfizer and Aurinia Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pfizer and Aurinia Pharmaceuticals
The main advantage of trading using opposite Pfizer and Aurinia Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, Aurinia 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 Aurinia Pharmaceuticals will offset losses from the drop in Aurinia Pharmaceuticals' long position.| Pfizer vs. Agilent Technologies | Pfizer vs. Equillium | Pfizer vs. 23Andme Holding Co | Pfizer vs. DiaMedica Therapeutics |
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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 Stocks Directory module to find actively traded stocks across global markets.
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