Correlation Between Pfizer and VanEck International
Can any of the company-specific risk be diversified away by investing in both Pfizer and VanEck International 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 VanEck International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pfizer Inc and VanEck International High, you can compare the effects of market volatilities on Pfizer and VanEck International 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 VanEck International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and VanEck International.
Diversification Opportunities for Pfizer and VanEck International
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pfizer and VanEck is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and VanEck International High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck International High 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 VanEck International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck International High has no effect on the direction of Pfizer i.e., Pfizer and VanEck International go up and down completely randomly.
Pair Corralation between Pfizer and VanEck International
Considering the 90-day investment horizon Pfizer Inc is expected to under-perform the VanEck International. In addition to that, Pfizer is 5.28 times more volatile than VanEck International High. It trades about -0.23 of its total potential returns per unit of risk. VanEck International High is currently generating about -0.16 per unit of volatility. If you would invest 2,104 in VanEck International High on August 27, 2024 and sell it today you would lose (23.00) from holding VanEck International High or give up 1.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pfizer Inc vs. VanEck International High
Performance |
| Timeline |
| Pfizer Inc |
| VanEck International High |
Pfizer and VanEck International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pfizer and VanEck International
The main advantage of trading using opposite Pfizer and VanEck International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, VanEck International 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 VanEck International will offset losses from the drop in VanEck International's long position.| Pfizer vs. Capricor Therapeutics | Pfizer vs. Soleno Therapeutics | Pfizer vs. Bio Path Holdings | Pfizer vs. Moleculin Biotech |
| VanEck International vs. First Trust Senior | VanEck International vs. First Trust Low | VanEck International vs. First Trust Enhanced | VanEck International vs. First Trust TCW |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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