Correlation Between Pfizer and Capital Group
Can any of the company-specific risk be diversified away by investing in both Pfizer and Capital Group 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 Capital Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pfizer Inc and Capital Group Core, you can compare the effects of market volatilities on Pfizer and Capital Group 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 Capital Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and Capital Group.
Diversification Opportunities for Pfizer and Capital Group
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Pfizer and Capital is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and Capital Group Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Group Core 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 Capital Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Group Core has no effect on the direction of Pfizer i.e., Pfizer and Capital Group go up and down completely randomly.
Pair Corralation between Pfizer and Capital Group
Considering the 90-day investment horizon Pfizer Inc is expected to under-perform the Capital Group. In addition to that, Pfizer is 1.93 times more volatile than Capital Group Core. It trades about -0.22 of its total potential returns per unit of risk. Capital Group Core is currently generating about 0.11 per unit of volatility. If you would invest 3,457 in Capital Group Core on August 28, 2024 and sell it today you would earn a total of 67.00 from holding Capital Group Core or generate 1.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pfizer Inc vs. Capital Group Core
Performance |
| Timeline |
| Pfizer Inc |
| Capital Group Core |
Pfizer and Capital Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pfizer and Capital Group
The main advantage of trading using opposite Pfizer and Capital Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, Capital Group 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 Capital Group will offset losses from the drop in Capital Group's long position.| Pfizer vs. Capricor Therapeutics | Pfizer vs. Soleno Therapeutics | Pfizer vs. Bio Path Holdings | Pfizer vs. Moleculin Biotech |
| Capital Group vs. Freedom Day Dividend | Capital Group vs. Davis Select International | Capital Group vs. iShares MSCI China | Capital Group vs. SmartETFs Dividend Builder |
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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