Correlation Between Pfizer and Eiger Biopharmaceutica
Can any of the company-specific risk be diversified away by investing in both Pfizer and Eiger Biopharmaceutica 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 Eiger Biopharmaceutica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pfizer Inc and Eiger Biopharmaceuticals, you can compare the effects of market volatilities on Pfizer and Eiger Biopharmaceutica 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 Eiger Biopharmaceutica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and Eiger Biopharmaceutica.
Diversification Opportunities for Pfizer and Eiger Biopharmaceutica
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pfizer and Eiger is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and Eiger Biopharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eiger Biopharmaceuticals 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 Eiger Biopharmaceutica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eiger Biopharmaceuticals has no effect on the direction of Pfizer i.e., Pfizer and Eiger Biopharmaceutica go up and down completely randomly.
Pair Corralation between Pfizer and Eiger Biopharmaceutica
If you would invest 74.00 in Eiger Biopharmaceuticals on August 25, 2024 and sell it today you would earn a total of 0.00 from holding Eiger Biopharmaceuticals or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 0.44% |
| Values | Daily Returns |
Pfizer Inc vs. Eiger Biopharmaceuticals
Performance |
| Timeline |
| Pfizer Inc |
| Eiger Biopharmaceuticals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Pfizer and Eiger Biopharmaceutica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pfizer and Eiger Biopharmaceutica
The main advantage of trading using opposite Pfizer and Eiger Biopharmaceutica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, Eiger Biopharmaceutica 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 Eiger Biopharmaceutica will offset losses from the drop in Eiger Biopharmaceutica's long position.| Pfizer vs. AbbVie Inc | Pfizer vs. Merck Company | Pfizer vs. Eli Lilly and | Pfizer vs. Bristol Myers Squibb |
| Eiger Biopharmaceutica vs. Spero Therapeutics | Eiger Biopharmaceutica vs. Bolt Biotherapeutics | Eiger Biopharmaceutica vs. Coherus BioSciences | Eiger Biopharmaceutica vs. Cingulate |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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