Correlation Between Pfizer and EA Series
Can any of the company-specific risk be diversified away by investing in both Pfizer and EA Series 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 EA Series into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pfizer Inc and EA Series Trust, you can compare the effects of market volatilities on Pfizer and EA Series 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 EA Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and EA Series.
Diversification Opportunities for Pfizer and EA Series
Poor diversification
The 3 months correlation between Pfizer and STXE is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and EA Series Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EA Series Trust 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 EA Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EA Series Trust has no effect on the direction of Pfizer i.e., Pfizer and EA Series go up and down completely randomly.
Pair Corralation between Pfizer and EA Series
Considering the 90-day investment horizon Pfizer Inc is expected to under-perform the EA Series. In addition to that, Pfizer is 2.23 times more volatile than EA Series Trust. It trades about -0.22 of its total potential returns per unit of risk. EA Series Trust is currently generating about -0.25 per unit of volatility. If you would invest 2,998 in EA Series Trust on August 30, 2024 and sell it today you would lose (119.00) from holding EA Series Trust or give up 3.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pfizer Inc vs. EA Series Trust
Performance |
| Timeline |
| Pfizer Inc |
| EA Series Trust |
Pfizer and EA Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pfizer and EA Series
The main advantage of trading using opposite Pfizer and EA Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, EA Series 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 EA Series will offset losses from the drop in EA Series' long position.| Pfizer vs. Pharvaris BV | Pfizer vs. Brinker International | Pfizer vs. Alcoa Corp | Pfizer vs. Direxion Daily FTSE |
| EA Series vs. EA Series Trust | EA Series vs. EA Series Trust | EA Series vs. EA Series Trust | EA Series vs. EA Series Trust |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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