Correlation Between Pfizer and FinTech Evolution

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Can any of the company-specific risk be diversified away by investing in both Pfizer and FinTech Evolution 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 FinTech Evolution into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pfizer Inc and FinTech Evolution Acquisition, you can compare the effects of market volatilities on Pfizer and FinTech Evolution 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 FinTech Evolution. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and FinTech Evolution.

Diversification Opportunities for Pfizer and FinTech Evolution

-0.82
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Pfizer and FinTech is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and FinTech Evolution Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FinTech Evolution 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 FinTech Evolution. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FinTech Evolution has no effect on the direction of Pfizer i.e., Pfizer and FinTech Evolution go up and down completely randomly.

Pair Corralation between Pfizer and FinTech Evolution

If you would invest  2,550  in Pfizer Inc on September 12, 2024 and sell it today you would lose (27.00) from holding Pfizer Inc or give up 1.06% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy0.4%
ValuesDaily Returns

Pfizer Inc  vs.  FinTech Evolution Acquisition

 Performance 
       Timeline  
Pfizer Inc 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Pfizer Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.
FinTech Evolution 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days FinTech Evolution Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, FinTech Evolution is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pfizer and FinTech Evolution Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Pfizer and FinTech Evolution

The main advantage of trading using opposite Pfizer and FinTech Evolution positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, FinTech Evolution 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 FinTech Evolution will offset losses from the drop in FinTech Evolution's long position.
The idea behind Pfizer Inc and FinTech Evolution Acquisition pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.

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