Correlation Between Pfizer and Trulieve Cannabis
Can any of the company-specific risk be diversified away by investing in both Pfizer and Trulieve Cannabis 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 Trulieve Cannabis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pfizer Inc and Trulieve Cannabis Corp, you can compare the effects of market volatilities on Pfizer and Trulieve Cannabis 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 Trulieve Cannabis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and Trulieve Cannabis.
Diversification Opportunities for Pfizer and Trulieve Cannabis
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pfizer and Trulieve is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and Trulieve Cannabis Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trulieve Cannabis Corp 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 Trulieve Cannabis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trulieve Cannabis Corp has no effect on the direction of Pfizer i.e., Pfizer and Trulieve Cannabis go up and down completely randomly.
Pair Corralation between Pfizer and Trulieve Cannabis
Considering the 90-day investment horizon Pfizer Inc is expected to under-perform the Trulieve Cannabis. But the stock apears to be less risky and, when comparing its historical volatility, Pfizer Inc is 3.97 times less risky than Trulieve Cannabis. The stock trades about -0.05 of its potential returns per unit of risk. The Trulieve Cannabis Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 410.00 in Trulieve Cannabis Corp on August 31, 2024 and sell it today you would earn a total of 203.00 from holding Trulieve Cannabis Corp or generate 49.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.73% |
| Values | Daily Returns |
Pfizer Inc vs. Trulieve Cannabis Corp
Performance |
| Timeline |
| Pfizer Inc |
| Trulieve Cannabis Corp |
Pfizer and Trulieve Cannabis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pfizer and Trulieve Cannabis
The main advantage of trading using opposite Pfizer and Trulieve Cannabis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, Trulieve Cannabis 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 Trulieve Cannabis will offset losses from the drop in Trulieve Cannabis' long position.| Pfizer vs. Johnson Johnson | Pfizer vs. RLJ Lodging Trust | Pfizer vs. Aquagold International | Pfizer vs. Stepstone Group |
| Trulieve Cannabis vs. Brainsway | Trulieve Cannabis vs. Venus Concept | Trulieve Cannabis vs. Tactile Systems Technology | Trulieve Cannabis vs. Icecure Medical |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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