Correlation Between Pfizer and PPG Industries
Can any of the company-specific risk be diversified away by investing in both Pfizer and PPG Industries 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 PPG Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pfizer Inc and PPG Industries, you can compare the effects of market volatilities on Pfizer and PPG Industries 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 PPG Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and PPG Industries.
Diversification Opportunities for Pfizer and PPG Industries
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Pfizer and PPG is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and PPG Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PPG Industries 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 PPG Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PPG Industries has no effect on the direction of Pfizer i.e., Pfizer and PPG Industries go up and down completely randomly.
Pair Corralation between Pfizer and PPG Industries
Considering the 90-day investment horizon Pfizer Inc is expected to generate 1.52 times more return on investment than PPG Industries. However, Pfizer is 1.52 times more volatile than PPG Industries. It trades about 0.08 of its potential returns per unit of risk. PPG Industries is currently generating about -0.09 per unit of risk. If you would invest 2,620 in Pfizer Inc on March 1, 2024 and sell it today you would earn a total of 210.00 from holding Pfizer Inc or generate 8.02% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Pfizer Inc vs. PPG Industries
Performance |
Timeline |
Pfizer Inc |
PPG Industries |
Pfizer and PPG Industries Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Pfizer and PPG Industries
The main advantage of trading using opposite Pfizer and PPG Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, PPG Industries 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 PPG Industries will offset losses from the drop in PPG Industries' long position.Pfizer vs. Universe Pharmaceuticals | Pfizer vs. Akanda Corp | Pfizer vs. Petros Pharmaceuticals | Pfizer vs. Sunshine Biopharma |
PPG Industries vs. Linde plc Ordinary | PPG Industries vs. LyondellBasell Industries NV | PPG Industries vs. Air Products and | PPG Industries vs. Cabot |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Fundamental Analysis View fundamental data based on most recent published financial statements | |
Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
CEOs Directory Screen CEOs from public companies around the world | |
Equity Valuation Check real value of public entities based on technical and fundamental data | |
ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
Stocks Directory Find actively traded stocks across global markets | |
USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |