Correlation Between Pfizer and ProShares UltraPro
Can any of the company-specific risk be diversified away by investing in both Pfizer and ProShares UltraPro 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 ProShares UltraPro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pfizer Inc and ProShares UltraPro Dow30, you can compare the effects of market volatilities on Pfizer and ProShares UltraPro 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 ProShares UltraPro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and ProShares UltraPro.
Diversification Opportunities for Pfizer and ProShares UltraPro
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Pfizer and ProShares is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and ProShares UltraPro Dow30 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares UltraPro Dow30 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 ProShares UltraPro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares UltraPro Dow30 has no effect on the direction of Pfizer i.e., Pfizer and ProShares UltraPro go up and down completely randomly.
Pair Corralation between Pfizer and ProShares UltraPro
Considering the 90-day investment horizon Pfizer Inc is expected to under-perform the ProShares UltraPro. But the stock apears to be less risky and, when comparing its historical volatility, Pfizer Inc is 1.76 times less risky than ProShares UltraPro. The stock trades about -0.21 of its potential returns per unit of risk. The ProShares UltraPro Dow30 is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 9,466 in ProShares UltraPro Dow30 on August 30, 2024 and sell it today you would earn a total of 1,644 from holding ProShares UltraPro Dow30 or generate 17.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pfizer Inc vs. ProShares UltraPro Dow30
Performance |
| Timeline |
| Pfizer Inc |
| ProShares UltraPro Dow30 |
Pfizer and ProShares UltraPro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pfizer and ProShares UltraPro
The main advantage of trading using opposite Pfizer and ProShares UltraPro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, ProShares UltraPro 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 ProShares UltraPro will offset losses from the drop in ProShares UltraPro's long position.| Pfizer vs. Emergent Biosolutions | Pfizer vs. Bausch Health Companies | Pfizer vs. Neurocrine Biosciences | Pfizer vs. Teva Pharma Industries |
| ProShares UltraPro vs. ProShares UltraPro Short | ProShares UltraPro vs. ProShares UltraPro SP500 | ProShares UltraPro vs. ProShares UltraPro Russell2000 | ProShares UltraPro vs. Direxion Daily SP500 |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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