Correlation Between Pfizer and SCOTTS
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By analyzing existing cross correlation between Pfizer Inc and SCOTTS MIRACLE GRO 45, you can compare the effects of market volatilities on Pfizer and SCOTTS 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 SCOTTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and SCOTTS.
Diversification Opportunities for Pfizer and SCOTTS
Very poor diversification
The 3 months correlation between Pfizer and SCOTTS is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and SCOTTS MIRACLE GRO 45 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCOTTS MIRACLE GRO 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 SCOTTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCOTTS MIRACLE GRO has no effect on the direction of Pfizer i.e., Pfizer and SCOTTS go up and down completely randomly.
Pair Corralation between Pfizer and SCOTTS
Considering the 90-day investment horizon Pfizer Inc is expected to under-perform the SCOTTS. But the stock apears to be less risky and, when comparing its historical volatility, Pfizer Inc is 1.41 times less risky than SCOTTS. The stock trades about -0.26 of its potential returns per unit of risk. The SCOTTS MIRACLE GRO 45 is currently generating about -0.16 of returns per unit of risk over similar time horizon. If you would invest 9,314 in SCOTTS MIRACLE GRO 45 on August 28, 2024 and sell it today you would lose (751.00) from holding SCOTTS MIRACLE GRO 45 or give up 8.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Pfizer Inc vs. SCOTTS MIRACLE GRO 45
Performance |
| Timeline |
| Pfizer Inc |
| SCOTTS MIRACLE GRO |
Pfizer and SCOTTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pfizer and SCOTTS
The main advantage of trading using opposite Pfizer and SCOTTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, SCOTTS 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 SCOTTS will offset losses from the drop in SCOTTS's long position.| Pfizer vs. Capricor Therapeutics | Pfizer vs. Soleno Therapeutics | Pfizer vs. Bio Path Holdings | Pfizer vs. Moleculin Biotech |
| SCOTTS vs. The Coca Cola | SCOTTS vs. JPMorgan Chase Co | SCOTTS vs. Dupont De Nemours | SCOTTS vs. Alcoa Corp |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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