Correlation Between Pfizer and Fidelity Small
Can any of the company-specific risk be diversified away by investing in both Pfizer and Fidelity Small 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 Fidelity Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pfizer Inc and Fidelity Small Cap, you can compare the effects of market volatilities on Pfizer and Fidelity Small 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 Fidelity Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and Fidelity Small.
Diversification Opportunities for Pfizer and Fidelity Small
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Pfizer and Fidelity is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and Fidelity Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Small Cap 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 Fidelity Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Small Cap has no effect on the direction of Pfizer i.e., Pfizer and Fidelity Small go up and down completely randomly.
Pair Corralation between Pfizer and Fidelity Small
Considering the 90-day investment horizon Pfizer Inc is expected to under-perform the Fidelity Small. In addition to that, Pfizer is 1.15 times more volatile than Fidelity Small Cap. It trades about -0.23 of its total potential returns per unit of risk. Fidelity Small Cap is currently generating about 0.22 per unit of volatility. If you would invest 3,389 in Fidelity Small Cap on August 28, 2024 and sell it today you would earn a total of 223.00 from holding Fidelity Small Cap or generate 6.58% 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. Fidelity Small Cap
Performance |
| Timeline |
| Pfizer Inc |
| Fidelity Small Cap |
Pfizer and Fidelity Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pfizer and Fidelity Small
The main advantage of trading using opposite Pfizer and Fidelity Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, Fidelity Small 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 Fidelity Small will offset losses from the drop in Fidelity Small's long position.| Pfizer vs. Capricor Therapeutics | Pfizer vs. Soleno Therapeutics | Pfizer vs. Bio Path Holdings | Pfizer vs. Moleculin Biotech |
| Fidelity Small vs. Fidelity Small Cap | Fidelity Small vs. Fidelity Advisor Mid | Fidelity Small vs. Fidelity Advisor Emerging |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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