Correlation Between Pfizer and Société Générale
Can any of the company-specific risk be diversified away by investing in both Pfizer and Société Générale 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 Société Générale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pfizer Inc and Socit Gnrale Socit, you can compare the effects of market volatilities on Pfizer and Société Générale 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 Société Générale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and Société Générale.
Diversification Opportunities for Pfizer and Société Générale
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pfizer and Société is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and Socit Gnrale Socit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Socit Gnrale Socit 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 Société Générale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Socit Gnrale Socit has no effect on the direction of Pfizer i.e., Pfizer and Société Générale go up and down completely randomly.
Pair Corralation between Pfizer and Société Générale
Considering the 90-day investment horizon Pfizer Inc is expected to under-perform the Société Générale. But the stock apears to be less risky and, when comparing its historical volatility, Pfizer Inc is 2.0 times less risky than Société Générale. The stock trades about -0.05 of its potential returns per unit of risk. The Socit Gnrale Socit is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,432 in Socit Gnrale Socit on September 2, 2024 and sell it today you would earn a total of 195.00 from holding Socit Gnrale Socit or generate 8.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 64.78% |
| Values | Daily Returns |
Pfizer Inc vs. Socit Gnrale Socit
Performance |
| Timeline |
| Pfizer Inc |
| Socit Gnrale Socit |
Pfizer and Société Générale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pfizer and Société Générale
The main advantage of trading using opposite Pfizer and Société Générale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, Société Générale 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 Société Générale will offset losses from the drop in Société Générale's long position.| Pfizer vs. Crinetics Pharmaceuticals | Pfizer vs. Enanta Pharmaceuticals | Pfizer vs. Amicus Therapeutics | Pfizer vs. Connect Biopharma Holdings |
| Société Générale vs. Banco Bradesco SA | Société Générale vs. Itau Unibanco Banco | Société Générale vs. Lloyds Banking Group | Société Générale vs. Deutsche Bank AG |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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