Correlation Between Pfizer and Global X
Can any of the company-specific risk be diversified away by investing in both Pfizer and Global X 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 Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pfizer Inc and Global X Blockchain, you can compare the effects of market volatilities on Pfizer and Global X 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 Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and Global X.
Diversification Opportunities for Pfizer and Global X
Pay attention - limited upside
The 3 months correlation between Pfizer and Global is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and Global X Blockchain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Blockchain 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 Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Blockchain has no effect on the direction of Pfizer i.e., Pfizer and Global X go up and down completely randomly.
Pair Corralation between Pfizer and Global X
Considering the 90-day investment horizon Pfizer Inc is expected to under-perform the Global X. But the stock apears to be less risky and, when comparing its historical volatility, Pfizer Inc is 4.57 times less risky than Global X. The stock trades about -0.37 of its potential returns per unit of risk. The Global X Blockchain is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 5,290 in Global X Blockchain on August 24, 2024 and sell it today you would earn a total of 1,238 from holding Global X Blockchain or generate 23.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pfizer Inc vs. Global X Blockchain
Performance |
| Timeline |
| Pfizer Inc |
| Global X Blockchain |
Pfizer and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pfizer and Global X
The main advantage of trading using opposite Pfizer and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.| Pfizer vs. Johnson Johnson | Pfizer vs. Small Cap Core | Pfizer vs. Freedom Holding Corp | Pfizer vs. Gfl Environmental Holdings |
| Global X vs. Vanguard Industrials Index | Global X vs. Vanguard Consumer Discretionary | Global X vs. Vanguard Materials Index | Global X vs. Vanguard Health Care |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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