Correlation Between Pfizer and SPDR Kensho
Can any of the company-specific risk be diversified away by investing in both Pfizer and SPDR Kensho 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 SPDR Kensho into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pfizer Inc and SPDR Kensho Future, you can compare the effects of market volatilities on Pfizer and SPDR Kensho 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 SPDR Kensho. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and SPDR Kensho.
Diversification Opportunities for Pfizer and SPDR Kensho
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Pfizer and SPDR is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and SPDR Kensho Future in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Kensho Future 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 SPDR Kensho. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Kensho Future has no effect on the direction of Pfizer i.e., Pfizer and SPDR Kensho go up and down completely randomly.
Pair Corralation between Pfizer and SPDR Kensho
Considering the 90-day investment horizon Pfizer Inc is expected to under-perform the SPDR Kensho. In addition to that, Pfizer is 1.43 times more volatile than SPDR Kensho Future. It trades about -0.05 of its total potential returns per unit of risk. SPDR Kensho Future is currently generating about 0.1 per unit of volatility. If you would invest 4,813 in SPDR Kensho Future on August 31, 2024 and sell it today you would earn a total of 2,104 from holding SPDR Kensho Future or generate 43.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Pfizer Inc vs. SPDR Kensho Future
Performance |
| Timeline |
| Pfizer Inc |
| SPDR Kensho Future |
Pfizer and SPDR Kensho Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pfizer and SPDR Kensho
The main advantage of trading using opposite Pfizer and SPDR Kensho positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, SPDR Kensho 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 SPDR Kensho will offset losses from the drop in SPDR Kensho's long position.| Pfizer vs. Johnson Johnson | Pfizer vs. RLJ Lodging Trust | Pfizer vs. Aquagold International | Pfizer vs. Stepstone Group |
| SPDR Kensho vs. SPDR STOXX Europe | SPDR Kensho vs. SPDR Bloomberg Barclays | SPDR Kensho vs. SPDR Kensho Intelligent | SPDR Kensho vs. SPDR SP Kensho |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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