Correlation Between Pfizer and Innate Pharma
Can any of the company-specific risk be diversified away by investing in both Pfizer and Innate Pharma 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 Innate Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pfizer Inc and Innate Pharma, you can compare the effects of market volatilities on Pfizer and Innate Pharma 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 Innate Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and Innate Pharma.
Diversification Opportunities for Pfizer and Innate Pharma
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pfizer and Innate is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and Innate Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innate Pharma 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 Innate Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innate Pharma has no effect on the direction of Pfizer i.e., Pfizer and Innate Pharma go up and down completely randomly.
Pair Corralation between Pfizer and Innate Pharma
Considering the 90-day investment horizon Pfizer Inc is expected to generate 0.25 times more return on investment than Innate Pharma. However, Pfizer Inc is 3.93 times less risky than Innate Pharma. It trades about -0.16 of its potential returns per unit of risk. Innate Pharma is currently generating about -0.12 per unit of risk. If you would invest 2,865 in Pfizer Inc on August 28, 2024 and sell it today you would lose (288.00) from holding Pfizer Inc or give up 10.05% 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. Innate Pharma
Performance |
| Timeline |
| Pfizer Inc |
| Innate Pharma |
Pfizer and Innate Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pfizer and Innate Pharma
The main advantage of trading using opposite Pfizer and Innate Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, Innate Pharma 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 Innate Pharma will offset losses from the drop in Innate Pharma's long position.| Pfizer vs. Capricor Therapeutics | Pfizer vs. Soleno Therapeutics | Pfizer vs. Bio Path Holdings | Pfizer vs. Moleculin Biotech |
| Innate Pharma vs. Eliem Therapeutics | Innate Pharma vs. HCW Biologics | Innate Pharma vs. Inhibrx | Innate Pharma vs. Anebulo Pharmaceuticals |
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 CEOs Directory module to screen CEOs from public companies around the world.
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