Correlation Between Pfizer and SPDR Portfolio
Can any of the company-specific risk be diversified away by investing in both Pfizer and SPDR Portfolio 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 SPDR Portfolio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pfizer Inc and SPDR Portfolio Corporate, you can compare the effects of market volatilities on Pfizer and SPDR Portfolio 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 SPDR Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and SPDR Portfolio.
Diversification Opportunities for Pfizer and SPDR Portfolio
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pfizer and SPDR is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and SPDR Portfolio Corporate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Portfolio Corporate 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 SPDR Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Portfolio Corporate has no effect on the direction of Pfizer i.e., Pfizer and SPDR Portfolio go up and down completely randomly.
Pair Corralation between Pfizer and SPDR Portfolio
Considering the 90-day investment horizon Pfizer Inc is expected to under-perform the SPDR Portfolio. In addition to that, Pfizer is 3.64 times more volatile than SPDR Portfolio Corporate. It trades about -0.21 of its total potential returns per unit of risk. SPDR Portfolio Corporate is currently generating about 0.08 per unit of volatility. If you would invest 2,911 in SPDR Portfolio Corporate on August 30, 2024 and sell it today you would earn a total of 22.00 from holding SPDR Portfolio Corporate or generate 0.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pfizer Inc vs. SPDR Portfolio Corporate
Performance |
| Timeline |
| Pfizer Inc |
| SPDR Portfolio Corporate |
Pfizer and SPDR Portfolio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pfizer and SPDR Portfolio
The main advantage of trading using opposite Pfizer and SPDR Portfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, SPDR Portfolio 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 SPDR Portfolio will offset losses from the drop in SPDR Portfolio's long position.| Pfizer vs. Emergent Biosolutions | Pfizer vs. Bausch Health Companies | Pfizer vs. Neurocrine Biosciences | Pfizer vs. Teva Pharma Industries |
| SPDR Portfolio vs. SPDR Barclays Intermediate | SPDR Portfolio vs. SPDR Portfolio Intermediate | SPDR Portfolio vs. SPDR Portfolio Mortgage | SPDR Portfolio vs. SPDR Barclays Long |
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 CEOs Directory module to screen CEOs from public companies around the world.
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