Correlation Between Pfizer and Lizhi
Can any of the company-specific risk be diversified away by investing in both Pfizer and Lizhi 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 Lizhi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pfizer Inc and Lizhi Inc, you can compare the effects of market volatilities on Pfizer and Lizhi 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 Lizhi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and Lizhi.
Diversification Opportunities for Pfizer and Lizhi
Significant diversification
The 3 months correlation between Pfizer and Lizhi is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and Lizhi Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lizhi Inc 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 Lizhi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lizhi Inc has no effect on the direction of Pfizer i.e., Pfizer and Lizhi go up and down completely randomly.
Pair Corralation between Pfizer and Lizhi
If you would invest 2,645 in Pfizer Inc on November 5, 2024 and sell it today you would earn a total of 7.00 from holding Pfizer Inc or generate 0.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 5.26% |
| Values | Daily Returns |
Pfizer Inc vs. Lizhi Inc
Performance |
| Timeline |
| Pfizer Inc |
| Lizhi Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Pfizer and Lizhi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pfizer and Lizhi
The main advantage of trading using opposite Pfizer and Lizhi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, Lizhi 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 Lizhi will offset losses from the drop in Lizhi's long position.| Pfizer vs. AbbVie Inc | Pfizer vs. Merck Company | Pfizer vs. Eli Lilly and | Pfizer vs. Bristol Myers Squibb |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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