Correlation Between Pfizer and Global X
Can any of the company-specific risk be diversified away by investing in both Pfizer and Global X 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 Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pfizer Inc and Global X Funds, you can compare the effects of market volatilities on Pfizer and Global X 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 Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and Global X.
Diversification Opportunities for Pfizer and Global X
Excellent diversification
The 3 months correlation between Pfizer and Global is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and Global X Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Funds 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 Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Funds has no effect on the direction of Pfizer i.e., Pfizer and Global X go up and down completely randomly.
Pair Corralation between Pfizer and Global X
Considering the 90-day investment horizon Pfizer Inc is expected to under-perform the Global X. In addition to that, Pfizer is 1.42 times more volatile than Global X Funds. It trades about -0.07 of its total potential returns per unit of risk. Global X Funds is currently generating about 0.1 per unit of volatility. If you would invest 2,055 in Global X Funds on August 30, 2024 and sell it today you would earn a total of 1,296 from holding Global X Funds or generate 63.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pfizer Inc vs. Global X Funds
Performance |
| Timeline |
| Pfizer Inc |
| Global X Funds |
Pfizer and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pfizer and Global X
The main advantage of trading using opposite Pfizer and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.| Pfizer vs. Pharvaris BV | Pfizer vs. Brinker International | Pfizer vs. Alcoa Corp | Pfizer vs. Direxion Daily FTSE |
| Global X vs. Global X SP | Global X vs. Amplify CWP Enhanced | Global X vs. Global X Russell | Global X vs. JPMorgan Nasdaq Equity |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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