Correlation Between Pfizer and 2Seventy Bio
Can any of the company-specific risk be diversified away by investing in both Pfizer and 2Seventy Bio 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 2Seventy Bio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pfizer Inc and 2Seventy Bio, you can compare the effects of market volatilities on Pfizer and 2Seventy Bio 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 2Seventy Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and 2Seventy Bio.
Diversification Opportunities for Pfizer and 2Seventy Bio
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pfizer and 2Seventy is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and 2Seventy Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 2Seventy Bio 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 2Seventy Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 2Seventy Bio has no effect on the direction of Pfizer i.e., Pfizer and 2Seventy Bio go up and down completely randomly.
Pair Corralation between Pfizer and 2Seventy Bio
Considering the 90-day investment horizon Pfizer Inc is expected to generate 0.36 times more return on investment than 2Seventy Bio. However, Pfizer Inc is 2.78 times less risky than 2Seventy Bio. It trades about -0.16 of its potential returns per unit of risk. 2Seventy Bio is currently generating about -0.14 per unit of risk. If you would invest 2,865 in Pfizer Inc on August 28, 2024 and sell it today you would lose (288.00) from holding Pfizer Inc or give up 10.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pfizer Inc vs. 2Seventy Bio
Performance |
| Timeline |
| Pfizer Inc |
| 2Seventy Bio |
Pfizer and 2Seventy Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pfizer and 2Seventy Bio
The main advantage of trading using opposite Pfizer and 2Seventy Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, 2Seventy Bio 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 2Seventy Bio will offset losses from the drop in 2Seventy Bio's long position.| Pfizer vs. Capricor Therapeutics | Pfizer vs. Soleno Therapeutics | Pfizer vs. Bio Path Holdings | Pfizer vs. Moleculin Biotech |
| 2Seventy Bio vs. Puma Biotechnology | 2Seventy Bio vs. Iovance Biotherapeutics | 2Seventy Bio vs. Sarepta Therapeutics | 2Seventy Bio vs. Day One Biopharmaceuticals |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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