Correlation Between Pfizer and Gear Energy
Can any of the company-specific risk be diversified away by investing in both Pfizer and Gear Energy 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 Gear Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pfizer Inc and Gear Energy, you can compare the effects of market volatilities on Pfizer and Gear Energy 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 Gear Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and Gear Energy.
Diversification Opportunities for Pfizer and Gear Energy
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Pfizer and Gear is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and Gear Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gear Energy 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 Gear Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gear Energy has no effect on the direction of Pfizer i.e., Pfizer and Gear Energy go up and down completely randomly.
Pair Corralation between Pfizer and Gear Energy
Considering the 90-day investment horizon Pfizer Inc is expected to generate 0.54 times more return on investment than Gear Energy. However, Pfizer Inc is 1.84 times less risky than Gear Energy. It trades about -0.03 of its potential returns per unit of risk. Gear Energy is currently generating about -0.24 per unit of risk. If you would invest 2,686 in Pfizer Inc on November 27, 2024 and sell it today you would lose (21.00) from holding Pfizer Inc or give up 0.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 55.0% |
| Values | Daily Returns |
Pfizer Inc vs. Gear Energy
Performance |
| Timeline |
| Pfizer Inc |
| Gear Energy |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Pfizer and Gear Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pfizer and Gear Energy
The main advantage of trading using opposite Pfizer and Gear Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, Gear Energy 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 Gear Energy will offset losses from the drop in Gear Energy's long position.| Pfizer vs. Emergent Biosolutions | Pfizer vs. Bausch Health Companies | Pfizer vs. Neurocrine Biosciences | Pfizer vs. Teva Pharma Industries |
| Gear Energy vs. Tamarack Valley Energy | Gear Energy vs. MEG Energy Corp | Gear Energy vs. Cardinal Energy | Gear Energy vs. Whitecap Resources |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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