Correlation Between Pfizer and Katahdin Bankshares
Can any of the company-specific risk be diversified away by investing in both Pfizer and Katahdin Bankshares 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 Katahdin Bankshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pfizer Inc and Katahdin Bankshares Corp, you can compare the effects of market volatilities on Pfizer and Katahdin Bankshares 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 Katahdin Bankshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and Katahdin Bankshares.
Diversification Opportunities for Pfizer and Katahdin Bankshares
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Pfizer and Katahdin is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and Katahdin Bankshares Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Katahdin Bankshares Corp 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 Katahdin Bankshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Katahdin Bankshares Corp has no effect on the direction of Pfizer i.e., Pfizer and Katahdin Bankshares go up and down completely randomly.
Pair Corralation between Pfizer and Katahdin Bankshares
Considering the 90-day investment horizon Pfizer Inc is expected to under-perform the Katahdin Bankshares. In addition to that, Pfizer is 1.12 times more volatile than Katahdin Bankshares Corp. It trades about -0.02 of its total potential returns per unit of risk. Katahdin Bankshares Corp is currently generating about 0.08 per unit of volatility. If you would invest 2,036 in Katahdin Bankshares Corp on September 14, 2024 and sell it today you would earn a total of 464.00 from holding Katahdin Bankshares Corp or generate 22.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 76.95% |
| Values | Daily Returns |
Pfizer Inc vs. Katahdin Bankshares Corp
Performance |
| Timeline |
| Pfizer Inc |
| Katahdin Bankshares Corp |
Pfizer and Katahdin Bankshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pfizer and Katahdin Bankshares
The main advantage of trading using opposite Pfizer and Katahdin Bankshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, Katahdin Bankshares 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 Katahdin Bankshares will offset losses from the drop in Katahdin Bankshares' long position.| Pfizer vs. AbbVie Inc | Pfizer vs. Merck Company | Pfizer vs. Eli Lilly and | Pfizer vs. Bristol Myers Squibb |
| Katahdin Bankshares vs. Freedom Bank of | Katahdin Bankshares vs. HUMANA INC | Katahdin Bankshares vs. Barloworld Ltd ADR | Katahdin Bankshares vs. Morningstar Unconstrained Allocation |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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