Correlation Between Pfizer and Liberty Gold

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Pfizer and Liberty Gold 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 Liberty Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pfizer Inc and Liberty Gold Corp, you can compare the effects of market volatilities on Pfizer and Liberty Gold 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 Liberty Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and Liberty Gold.

Diversification Opportunities for Pfizer and Liberty Gold

0.74
  Correlation Coefficient

Poor diversification

The 3 months correlation between Pfizer and Liberty is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and Liberty Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Gold 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 Liberty Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liberty Gold Corp has no effect on the direction of Pfizer i.e., Pfizer and Liberty Gold go up and down completely randomly.

Pair Corralation between Pfizer and Liberty Gold

Considering the 90-day investment horizon Pfizer Inc is expected to under-perform the Liberty Gold. But the stock apears to be less risky and, when comparing its historical volatility, Pfizer Inc is 2.92 times less risky than Liberty Gold. The stock trades about -0.05 of its potential returns per unit of risk. The Liberty Gold Corp is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  32.00  in Liberty Gold Corp on August 31, 2024 and sell it today you would lose (11.00) from holding Liberty Gold Corp or give up 34.37% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy99.73%
ValuesDaily Returns

Pfizer Inc  vs.  Liberty Gold Corp

 Performance 
       Timeline  
Pfizer Inc 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Pfizer Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Pfizer is not utilizing all of its potentials. The new stock price tumult, may contribute to shorter-term losses for the shareholders.
Liberty Gold Corp 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Liberty Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pfizer and Liberty Gold Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Pfizer and Liberty Gold

The main advantage of trading using opposite Pfizer and Liberty Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, Liberty Gold 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 Liberty Gold will offset losses from the drop in Liberty Gold's long position.
The idea behind Pfizer Inc and Liberty Gold Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..

Other Complementary Tools

Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Commodity Directory
Find actively traded commodities issued by global exchanges
Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes
Sync Your Broker
Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors.
Portfolio Dashboard
Portfolio dashboard that provides centralized access to all your investments