Correlation Between Pfizer and COLGATE
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By analyzing existing cross correlation between Pfizer Inc and COLGATE PALMOLIVE MEDIUM TERM, you can compare the effects of market volatilities on Pfizer and COLGATE 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 COLGATE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and COLGATE.
Diversification Opportunities for Pfizer and COLGATE
Poor diversification
The 3 months correlation between Pfizer and COLGATE is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and COLGATE PALMOLIVE MEDIUM TERM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COLGATE PALMOLIVE 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 COLGATE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COLGATE PALMOLIVE has no effect on the direction of Pfizer i.e., Pfizer and COLGATE go up and down completely randomly.
Pair Corralation between Pfizer and COLGATE
Considering the 90-day investment horizon Pfizer Inc is expected to under-perform the COLGATE. In addition to that, Pfizer is 1.34 times more volatile than COLGATE PALMOLIVE MEDIUM TERM. It trades about -0.13 of its total potential returns per unit of risk. COLGATE PALMOLIVE MEDIUM TERM is currently generating about -0.1 per unit of volatility. If you would invest 9,146 in COLGATE PALMOLIVE MEDIUM TERM on September 12, 2024 and sell it today you would lose (447.00) from holding COLGATE PALMOLIVE MEDIUM TERM or give up 4.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 73.44% |
| Values | Daily Returns |
Pfizer Inc vs. COLGATE PALMOLIVE MEDIUM TERM
Performance |
| Timeline |
| Pfizer Inc |
| COLGATE PALMOLIVE |
Pfizer and COLGATE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pfizer and COLGATE
The main advantage of trading using opposite Pfizer and COLGATE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, COLGATE 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 COLGATE will offset losses from the drop in COLGATE's long position.| Pfizer vs. AbbVie Inc | Pfizer vs. Merck Company | Pfizer vs. Eli Lilly and | Pfizer vs. Bristol Myers Squibb |
| COLGATE vs. AEP TEX INC | COLGATE vs. US BANK NATIONAL | COLGATE vs. Applied Blockchain | COLGATE vs. BigBearai Holdings |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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