Correlation Between Pfizer and Santen Pharmaceutical
Can any of the company-specific risk be diversified away by investing in both Pfizer and Santen Pharmaceutical 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 Santen Pharmaceutical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pfizer Inc and Santen Pharmaceutical Co, you can compare the effects of market volatilities on Pfizer and Santen Pharmaceutical 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 Santen Pharmaceutical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and Santen Pharmaceutical.
Diversification Opportunities for Pfizer and Santen Pharmaceutical
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pfizer and Santen is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and Santen Pharmaceutical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Santen Pharmaceutical 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 Santen Pharmaceutical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Santen Pharmaceutical has no effect on the direction of Pfizer i.e., Pfizer and Santen Pharmaceutical go up and down completely randomly.
Pair Corralation between Pfizer and Santen Pharmaceutical
Considering the 90-day investment horizon Pfizer Inc is expected to generate 0.72 times more return on investment than Santen Pharmaceutical. However, Pfizer Inc is 1.39 times less risky than Santen Pharmaceutical. It trades about -0.22 of its potential returns per unit of risk. Santen Pharmaceutical Co is currently generating about -0.3 per unit of risk. If you would invest 2,808 in Pfizer Inc on August 31, 2024 and sell it today you would lose (225.00) from holding Pfizer Inc or give up 8.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pfizer Inc vs. Santen Pharmaceutical Co
Performance |
| Timeline |
| Pfizer Inc |
| Santen Pharmaceutical |
Pfizer and Santen Pharmaceutical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pfizer and Santen Pharmaceutical
The main advantage of trading using opposite Pfizer and Santen Pharmaceutical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, Santen Pharmaceutical 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 Santen Pharmaceutical will offset losses from the drop in Santen Pharmaceutical's long position.| Pfizer vs. Johnson Johnson | Pfizer vs. RLJ Lodging Trust | Pfizer vs. Aquagold International | Pfizer vs. Stepstone Group |
| Santen Pharmaceutical vs. Sanofi ADR | Santen Pharmaceutical vs. Bristol Myers Squibb | Santen Pharmaceutical vs. AstraZeneca PLC ADR | Santen Pharmaceutical vs. Gilead Sciences |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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