Correlation Between Telecom Argentina and Pfizer
Can any of the company-specific risk be diversified away by investing in both Telecom Argentina and Pfizer 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 Telecom Argentina and Pfizer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telecom Argentina and Pfizer Inc, you can compare the effects of market volatilities on Telecom Argentina and Pfizer 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 Telecom Argentina with a short position of Pfizer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telecom Argentina and Pfizer.
Diversification Opportunities for Telecom Argentina and Pfizer
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Telecom and Pfizer is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Telecom Argentina and Pfizer Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pfizer Inc and Telecom Argentina 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 Telecom Argentina are associated (or correlated) with Pfizer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pfizer Inc has no effect on the direction of Telecom Argentina i.e., Telecom Argentina and Pfizer go up and down completely randomly.
Pair Corralation between Telecom Argentina and Pfizer
Assuming the 90 days trading horizon Telecom Argentina is expected to generate 1.53 times more return on investment than Pfizer. However, Telecom Argentina is 1.53 times more volatile than Pfizer Inc. It trades about 0.12 of its potential returns per unit of risk. Pfizer Inc is currently generating about 0.01 per unit of risk. If you would invest 156,445 in Telecom Argentina on August 27, 2024 and sell it today you would earn a total of 141,555 from holding Telecom Argentina or generate 90.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telecom Argentina vs. Pfizer Inc
Performance |
| Timeline |
| Telecom Argentina |
| Pfizer Inc |
Telecom Argentina and Pfizer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telecom Argentina and Pfizer
The main advantage of trading using opposite Telecom Argentina and Pfizer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telecom Argentina position performs unexpectedly, Pfizer 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 Pfizer will offset losses from the drop in Pfizer's long position.| Telecom Argentina vs. Grupo Televisa SAB | Telecom Argentina vs. United States Steel | Telecom Argentina vs. Pfizer Inc | Telecom Argentina vs. Distribuidora de Gas |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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