Correlation Between Pfizer and PSB Holdings
Can any of the company-specific risk be diversified away by investing in both Pfizer and PSB Holdings 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 PSB Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pfizer Inc and PSB Holdings, you can compare the effects of market volatilities on Pfizer and PSB Holdings 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 PSB Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and PSB Holdings.
Diversification Opportunities for Pfizer and PSB Holdings
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Pfizer and PSB is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and PSB Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PSB Holdings 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 PSB Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PSB Holdings has no effect on the direction of Pfizer i.e., Pfizer and PSB Holdings go up and down completely randomly.
Pair Corralation between Pfizer and PSB Holdings
Considering the 90-day investment horizon Pfizer Inc is expected to under-perform the PSB Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Pfizer Inc is 1.57 times less risky than PSB Holdings. The stock trades about -0.08 of its potential returns per unit of risk. The PSB Holdings is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,071 in PSB Holdings on September 12, 2024 and sell it today you would earn a total of 629.00 from holding PSB Holdings or generate 30.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 82.42% |
| Values | Daily Returns |
Pfizer Inc vs. PSB Holdings
Performance |
| Timeline |
| Pfizer Inc |
| PSB Holdings |
Pfizer and PSB Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pfizer and PSB Holdings
The main advantage of trading using opposite Pfizer and PSB Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, PSB Holdings 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 PSB Holdings will offset losses from the drop in PSB Holdings' long position.| Pfizer vs. Victory Integrity Smallmid Cap | Pfizer vs. Hilton Worldwide Holdings | Pfizer vs. NVIDIA | Pfizer vs. JPMorgan Chase Co |
| PSB Holdings vs. Eagle Financial Services | PSB Holdings vs. National Capital Bank | PSB Holdings vs. Community Heritage Financial | PSB Holdings vs. Citizens Financial Corp |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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