Correlation Between Pfizer and Bolloré SE
Can any of the company-specific risk be diversified away by investing in both Pfizer and Bolloré SE 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 Bolloré SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pfizer Inc and Bollor SE, you can compare the effects of market volatilities on Pfizer and Bolloré SE 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 Bolloré SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and Bolloré SE.
Diversification Opportunities for Pfizer and Bolloré SE
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pfizer and Bolloré is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and Bollor SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bolloré SE 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 Bolloré SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bolloré SE has no effect on the direction of Pfizer i.e., Pfizer and Bolloré SE go up and down completely randomly.
Pair Corralation between Pfizer and Bolloré SE
Considering the 90-day investment horizon Pfizer Inc is expected to under-perform the Bolloré SE. But the stock apears to be less risky and, when comparing its historical volatility, Pfizer Inc is 1.35 times less risky than Bolloré SE. The stock trades about -0.06 of its potential returns per unit of risk. The Bollor SE is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 636.00 in Bollor SE on September 2, 2024 and sell it today you would lose (17.00) from holding Bollor SE or give up 2.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pfizer Inc vs. Bollor SE
Performance |
| Timeline |
| Pfizer Inc |
| Bolloré SE |
Pfizer and Bolloré SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pfizer and Bolloré SE
The main advantage of trading using opposite Pfizer and Bolloré SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, Bolloré SE 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 Bolloré SE will offset losses from the drop in Bolloré SE's long position.| Pfizer vs. Crinetics Pharmaceuticals | Pfizer vs. Enanta Pharmaceuticals | Pfizer vs. Amicus Therapeutics | Pfizer vs. Connect Biopharma Holdings |
| Bolloré SE vs. Universal Music Group | Bolloré SE vs. Universal Media Group | Bolloré SE vs. Reading International | Bolloré SE vs. Warner Music Group |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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