Correlation Between Pfizer and PRAXAIR
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By analyzing existing cross correlation between Pfizer Inc and PRAXAIR INC 355, you can compare the effects of market volatilities on Pfizer and PRAXAIR 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 PRAXAIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and PRAXAIR.
Diversification Opportunities for Pfizer and PRAXAIR
Modest diversification
The 3 months correlation between Pfizer and PRAXAIR is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and PRAXAIR INC 355 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PRAXAIR INC 355 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 PRAXAIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PRAXAIR INC 355 has no effect on the direction of Pfizer i.e., Pfizer and PRAXAIR go up and down completely randomly.
Pair Corralation between Pfizer and PRAXAIR
Considering the 90-day investment horizon Pfizer Inc is expected to under-perform the PRAXAIR. But the stock apears to be less risky and, when comparing its historical volatility, Pfizer Inc is 86.68 times less risky than PRAXAIR. The stock trades about -0.08 of its potential returns per unit of risk. The PRAXAIR INC 355 is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 8,510 in PRAXAIR INC 355 on September 3, 2024 and sell it today you would lose (519.00) from holding PRAXAIR INC 355 or give up 6.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 38.18% |
| Values | Daily Returns |
Pfizer Inc vs. PRAXAIR INC 355
Performance |
| Timeline |
| Pfizer Inc |
| PRAXAIR INC 355 |
Pfizer and PRAXAIR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pfizer and PRAXAIR
The main advantage of trading using opposite Pfizer and PRAXAIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, PRAXAIR 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 PRAXAIR will offset losses from the drop in PRAXAIR's long position.| Pfizer vs. Merck Company | Pfizer vs. Johnson Johnson | Pfizer vs. Highway Holdings Limited | Pfizer vs. QCR Holdings |
| PRAXAIR vs. The Travelers Companies | PRAXAIR vs. GE Aerospace | PRAXAIR vs. Walmart | PRAXAIR vs. Pfizer Inc |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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