Correlation Between Compania and Pfizer
Can any of the company-specific risk be diversified away by investing in both Compania 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 Compania and Pfizer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compania de Transporte and Pfizer Inc, you can compare the effects of market volatilities on Compania 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 Compania with a short position of Pfizer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compania and Pfizer.
Diversification Opportunities for Compania and Pfizer
Very good diversification
The 3 months correlation between Compania and Pfizer is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Compania de Transporte and Pfizer Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pfizer Inc and Compania 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 Compania de Transporte 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 Compania i.e., Compania and Pfizer go up and down completely randomly.
Pair Corralation between Compania and Pfizer
Assuming the 90 days trading horizon Compania de Transporte is expected to under-perform the Pfizer. In addition to that, Compania is 2.95 times more volatile than Pfizer Inc. It trades about -0.25 of its total potential returns per unit of risk. Pfizer Inc is currently generating about 0.28 per unit of volatility. If you would invest 740,000 in Pfizer Inc on October 20, 2024 and sell it today you would earn a total of 43,000 from holding Pfizer Inc or generate 5.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compania de Transporte vs. Pfizer Inc
Performance |
| Timeline |
| Compania de Transporte |
| Pfizer Inc |
Compania and Pfizer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compania and Pfizer
The main advantage of trading using opposite Compania and Pfizer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compania 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.| Compania vs. Pampa Energia SA | Compania vs. American Express Co | Compania vs. Transportadora de Gas | Compania vs. Central Puerto SA |
| Pfizer vs. Transportadora de Gas | Pfizer vs. Agrometal SAI | Pfizer vs. Compania de Transporte | Pfizer vs. Telecom Argentina |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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