Correlation Between Pfizer and SSgA SPDR
Can any of the company-specific risk be diversified away by investing in both Pfizer and SSgA SPDR 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 SSgA SPDR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pfizer Inc and SSgA SPDR ETFs, you can compare the effects of market volatilities on Pfizer and SSgA SPDR 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 SSgA SPDR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and SSgA SPDR.
Diversification Opportunities for Pfizer and SSgA SPDR
Pay attention - limited upside
The 3 months correlation between Pfizer and SSgA is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and SSgA SPDR ETFs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSgA SPDR ETFs 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 SSgA SPDR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSgA SPDR ETFs has no effect on the direction of Pfizer i.e., Pfizer and SSgA SPDR go up and down completely randomly.
Pair Corralation between Pfizer and SSgA SPDR
Considering the 90-day investment horizon Pfizer Inc is expected to under-perform the SSgA SPDR. In addition to that, Pfizer is 1.06 times more volatile than SSgA SPDR ETFs. It trades about -0.08 of its total potential returns per unit of risk. SSgA SPDR ETFs is currently generating about 0.05 per unit of volatility. If you would invest 5,209 in SSgA SPDR ETFs on September 3, 2024 and sell it today you would earn a total of 1,779 from holding SSgA SPDR ETFs or generate 34.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.38% |
| Values | Daily Returns |
Pfizer Inc vs. SSgA SPDR ETFs
Performance |
| Timeline |
| Pfizer Inc |
| SSgA SPDR ETFs |
Pfizer and SSgA SPDR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pfizer and SSgA SPDR
The main advantage of trading using opposite Pfizer and SSgA SPDR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, SSgA SPDR 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 SSgA SPDR will offset losses from the drop in SSgA SPDR's long position.| Pfizer vs. Merck Company | Pfizer vs. Johnson Johnson | Pfizer vs. Highway Holdings Limited | Pfizer vs. QCR Holdings |
| SSgA SPDR vs. Vanguard Total Stock | SSgA SPDR vs. SPDR SP 500 | SSgA SPDR vs. Vanguard Total Bond | SSgA SPDR vs. Vanguard Value Index |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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