Correlation Between Pfizer and Pacer Swan
Can any of the company-specific risk be diversified away by investing in both Pfizer and Pacer Swan 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 Pacer Swan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pfizer Inc and Pacer Swan SOS, you can compare the effects of market volatilities on Pfizer and Pacer Swan 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 Pacer Swan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and Pacer Swan.
Diversification Opportunities for Pfizer and Pacer Swan
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Pfizer and Pacer is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and Pacer Swan SOS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacer Swan SOS 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 Pacer Swan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacer Swan SOS has no effect on the direction of Pfizer i.e., Pfizer and Pacer Swan go up and down completely randomly.
Pair Corralation between Pfizer and Pacer Swan
Considering the 90-day investment horizon Pfizer Inc is expected to under-perform the Pacer Swan. In addition to that, Pfizer is 3.01 times more volatile than Pacer Swan SOS. It trades about -0.04 of its total potential returns per unit of risk. Pacer Swan SOS is currently generating about 0.13 per unit of volatility. If you would invest 2,667 in Pacer Swan SOS on September 1, 2024 and sell it today you would earn a total of 198.00 from holding Pacer Swan SOS or generate 7.42% 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. Pacer Swan SOS
Performance |
| Timeline |
| Pfizer Inc |
| Pacer Swan SOS |
Pfizer and Pacer Swan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pfizer and Pacer Swan
The main advantage of trading using opposite Pfizer and Pacer Swan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, Pacer Swan 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 Pacer Swan will offset losses from the drop in Pacer Swan's long position.| Pfizer vs. Crinetics Pharmaceuticals | Pfizer vs. Enanta Pharmaceuticals | Pfizer vs. Amicus Therapeutics | Pfizer vs. Connect Biopharma Holdings |
| Pacer Swan vs. Innovator ETFs Trust | Pacer Swan vs. First Trust Cboe | Pacer Swan vs. Innovator SP 500 | Pacer Swan vs. Innovator Equity Power |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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