Correlation Between Pfizer and Natera
Can any of the company-specific risk be diversified away by investing in both Pfizer and Natera 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 Natera into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pfizer Inc and Natera Inc, you can compare the effects of market volatilities on Pfizer and Natera 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 Natera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and Natera.
Diversification Opportunities for Pfizer and Natera
Pay attention - limited upside
The 3 months correlation between Pfizer and Natera is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and Natera Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natera 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 Natera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natera Inc has no effect on the direction of Pfizer i.e., Pfizer and Natera go up and down completely randomly.
Pair Corralation between Pfizer and Natera
Considering the 90-day investment horizon Pfizer is expected to generate 30.29 times less return on investment than Natera. But when comparing it to its historical volatility, Pfizer Inc is 1.97 times less risky than Natera. It trades about 0.01 of its potential returns per unit of risk. Natera Inc is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 6,594 in Natera Inc on August 28, 2024 and sell it today you would earn a total of 9,845 from holding Natera Inc or generate 149.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pfizer Inc vs. Natera Inc
Performance |
| Timeline |
| Pfizer Inc |
| Natera Inc |
Pfizer and Natera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pfizer and Natera
The main advantage of trading using opposite Pfizer and Natera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, Natera 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 Natera will offset losses from the drop in Natera's long position.| Pfizer vs. Capricor Therapeutics | Pfizer vs. Soleno Therapeutics | Pfizer vs. Bio Path Holdings | Pfizer vs. Moleculin Biotech |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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