Correlation Between Pfizer and Exchange Traded
Can any of the company-specific risk be diversified away by investing in both Pfizer and Exchange Traded 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 Exchange Traded into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pfizer Inc and Exchange Traded Concepts, you can compare the effects of market volatilities on Pfizer and Exchange Traded 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 Exchange Traded. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and Exchange Traded.
Diversification Opportunities for Pfizer and Exchange Traded
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Pfizer and Exchange is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and Exchange Traded Concepts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exchange Traded Concepts 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 Exchange Traded. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exchange Traded Concepts has no effect on the direction of Pfizer i.e., Pfizer and Exchange Traded go up and down completely randomly.
Pair Corralation between Pfizer and Exchange Traded
Considering the 90-day investment horizon Pfizer Inc is expected to under-perform the Exchange Traded. But the stock apears to be less risky and, when comparing its historical volatility, Pfizer Inc is 1.38 times less risky than Exchange Traded. The stock trades about -0.04 of its potential returns per unit of risk. The Exchange Traded Concepts is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 3,348 in Exchange Traded Concepts on September 1, 2024 and sell it today you would earn a total of 1,314 from holding Exchange Traded Concepts or generate 39.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Pfizer Inc vs. Exchange Traded Concepts
Performance |
| Timeline |
| Pfizer Inc |
| Exchange Traded Concepts |
Pfizer and Exchange Traded Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pfizer and Exchange Traded
The main advantage of trading using opposite Pfizer and Exchange Traded positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, Exchange Traded 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 Exchange Traded will offset losses from the drop in Exchange Traded's long position.| Pfizer vs. Crinetics Pharmaceuticals | Pfizer vs. Enanta Pharmaceuticals | Pfizer vs. Amicus Therapeutics | Pfizer vs. Connect Biopharma Holdings |
| Exchange Traded vs. First Trust Exchange Traded | Exchange Traded vs. Ultimus Managers Trust | Exchange Traded vs. Horizon Kinetics Medical | Exchange Traded vs. Harbor Health Care |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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