Correlation Between Pfizer and Niagara Mohawk
Can any of the company-specific risk be diversified away by investing in both Pfizer and Niagara Mohawk 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 Niagara Mohawk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pfizer Inc and Niagara Mohawk Power, you can compare the effects of market volatilities on Pfizer and Niagara Mohawk 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 Niagara Mohawk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and Niagara Mohawk.
Diversification Opportunities for Pfizer and Niagara Mohawk
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pfizer and Niagara is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and Niagara Mohawk Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Niagara Mohawk Power 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 Niagara Mohawk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Niagara Mohawk Power has no effect on the direction of Pfizer i.e., Pfizer and Niagara Mohawk go up and down completely randomly.
Pair Corralation between Pfizer and Niagara Mohawk
Considering the 90-day investment horizon Pfizer Inc is expected to under-perform the Niagara Mohawk. But the stock apears to be less risky and, when comparing its historical volatility, Pfizer Inc is 1.69 times less risky than Niagara Mohawk. The stock trades about -0.07 of its potential returns per unit of risk. The Niagara Mohawk Power is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 6,418 in Niagara Mohawk Power on August 29, 2024 and sell it today you would earn a total of 142.00 from holding Niagara Mohawk Power or generate 2.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pfizer Inc vs. Niagara Mohawk Power
Performance |
| Timeline |
| Pfizer Inc |
| Niagara Mohawk Power |
Pfizer and Niagara Mohawk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pfizer and Niagara Mohawk
The main advantage of trading using opposite Pfizer and Niagara Mohawk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, Niagara Mohawk 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 Niagara Mohawk will offset losses from the drop in Niagara Mohawk's long position.| Pfizer vs. Pharvaris BV | Pfizer vs. Brinker International | Pfizer vs. Alcoa Corp | Pfizer vs. Direxion Daily FTSE |
| Niagara Mohawk vs. Mangazeya Mining | Niagara Mohawk vs. FitLife Brands, Common | Niagara Mohawk vs. Ultra Clean Holdings | Niagara Mohawk vs. Grocery Outlet Holding |
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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