Correlation Between Pfizer and The Hartford
Can any of the company-specific risk be diversified away by investing in both Pfizer and The Hartford 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 The Hartford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pfizer Inc and The Hartford Equity, you can compare the effects of market volatilities on Pfizer and The Hartford 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 The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and The Hartford.
Diversification Opportunities for Pfizer and The Hartford
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Pfizer and The is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and The Hartford Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Equity 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 The Hartford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Equity has no effect on the direction of Pfizer i.e., Pfizer and The Hartford go up and down completely randomly.
Pair Corralation between Pfizer and The Hartford
Considering the 90-day investment horizon Pfizer Inc is expected to under-perform the The Hartford. In addition to that, Pfizer is 2.47 times more volatile than The Hartford Equity. It trades about -0.17 of its total potential returns per unit of risk. The Hartford Equity is currently generating about 0.21 per unit of volatility. If you would invest 2,212 in The Hartford Equity on September 5, 2024 and sell it today you would earn a total of 69.00 from holding The Hartford Equity or generate 3.12% 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. The Hartford Equity
Performance |
| Timeline |
| Pfizer Inc |
| Hartford Equity |
Pfizer and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pfizer and The Hartford
The main advantage of trading using opposite Pfizer and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, The Hartford 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 The Hartford will offset losses from the drop in The Hartford's long position.| Pfizer vs. Crinetics Pharmaceuticals | Pfizer vs. Enanta Pharmaceuticals | Pfizer vs. Amicus Therapeutics | Pfizer vs. Connect Biopharma Holdings |
| The Hartford vs. Invesco Developing Markets | The Hartford vs. Delaware Diversified Income | The Hartford vs. Mfs Growth Fund | The Hartford vs. The Hartford Balanced |
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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