Correlation Between Pfizer and Bayer AG
Can any of the company-specific risk be diversified away by investing in both Pfizer and Bayer AG 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 Bayer AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pfizer Inc and Bayer AG PK, you can compare the effects of market volatilities on Pfizer and Bayer AG 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 Bayer AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and Bayer AG.
Diversification Opportunities for Pfizer and Bayer AG
Excellent diversification
The 3 months correlation between Pfizer and Bayer is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and Bayer AG PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bayer AG PK 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 Bayer AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bayer AG PK has no effect on the direction of Pfizer i.e., Pfizer and Bayer AG go up and down completely randomly.
Pair Corralation between Pfizer and Bayer AG
If you would invest 1,686 in Bayer AG PK on August 27, 2024 and sell it today you would earn a total of 0.00 from holding Bayer AG PK or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Pfizer Inc vs. Bayer AG PK
Performance |
| Timeline |
| Pfizer Inc |
| Bayer AG PK |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Pfizer and Bayer AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pfizer and Bayer AG
The main advantage of trading using opposite Pfizer and Bayer AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, Bayer AG 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 Bayer AG will offset losses from the drop in Bayer AG's long position.| Pfizer vs. Capricor Therapeutics | Pfizer vs. Soleno Therapeutics | Pfizer vs. Bio Path Holdings | Pfizer vs. Moleculin Biotech |
| Bayer AG vs. Novartis AG ADR | Bayer AG vs. Sanofi ADR | Bayer AG vs. AstraZeneca PLC ADR | Bayer AG vs. GlaxoSmithKline PLC ADR |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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