Correlation Between Pfizer and Secure Energy
Can any of the company-specific risk be diversified away by investing in both Pfizer and Secure Energy 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 Secure Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pfizer Inc and Secure Energy Services, you can compare the effects of market volatilities on Pfizer and Secure Energy 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 Secure Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and Secure Energy.
Diversification Opportunities for Pfizer and Secure Energy
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Pfizer and Secure is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and Secure Energy Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Secure Energy Services 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 Secure Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Secure Energy Services has no effect on the direction of Pfizer i.e., Pfizer and Secure Energy go up and down completely randomly.
Pair Corralation between Pfizer and Secure Energy
Considering the 90-day investment horizon Pfizer Inc is expected to generate 0.76 times more return on investment than Secure Energy. However, Pfizer Inc is 1.32 times less risky than Secure Energy. It trades about 0.12 of its potential returns per unit of risk. Secure Energy Services is currently generating about -0.11 per unit of risk. If you would invest 2,577 in Pfizer Inc on October 20, 2024 and sell it today you would earn a total of 53.00 from holding Pfizer Inc or generate 2.06% 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. Secure Energy Services
Performance |
| Timeline |
| Pfizer Inc |
| Secure Energy Services |
Pfizer and Secure Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pfizer and Secure Energy
The main advantage of trading using opposite Pfizer and Secure Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, Secure Energy 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 Secure Energy will offset losses from the drop in Secure Energy's long position.| Pfizer vs. AbbVie Inc | Pfizer vs. Merck Company | Pfizer vs. Eli Lilly and | Pfizer vs. Bristol Myers Squibb |
| Secure Energy vs. Aqua Metals | Secure Energy vs. LanzaTech Global | Secure Energy vs. Waste Management | Secure Energy vs. Clean Harbors |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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