Correlation Between Pfizer and Golden Energy
Can any of the company-specific risk be diversified away by investing in both Pfizer and Golden 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 Golden 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 Golden Energy Offshore, you can compare the effects of market volatilities on Pfizer and Golden 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 Golden Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and Golden Energy.
Diversification Opportunities for Pfizer and Golden Energy
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Pfizer and Golden is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and Golden Energy Offshore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Energy Offshore 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 Golden Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Energy Offshore has no effect on the direction of Pfizer i.e., Pfizer and Golden Energy go up and down completely randomly.
Pair Corralation between Pfizer and Golden Energy
Considering the 90-day investment horizon Pfizer Inc is expected to under-perform the Golden Energy. But the stock apears to be less risky and, when comparing its historical volatility, Pfizer Inc is 62.74 times less risky than Golden Energy. The stock trades about -0.01 of its potential returns per unit of risk. The Golden Energy Offshore is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 15.00 in Golden Energy Offshore on September 3, 2024 and sell it today you would earn a total of 255.00 from holding Golden Energy Offshore or generate 1700.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 53.51% |
| Values | Daily Returns |
Pfizer Inc vs. Golden Energy Offshore
Performance |
| Timeline |
| Pfizer Inc |
| Golden Energy Offshore |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Pfizer and Golden Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pfizer and Golden Energy
The main advantage of trading using opposite Pfizer and Golden Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, Golden 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 Golden Energy will offset losses from the drop in Golden Energy's long position.| Pfizer vs. Merck Company | Pfizer vs. Johnson Johnson | Pfizer vs. Highway Holdings Limited | Pfizer vs. QCR Holdings |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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