Correlation Between Pfizer and Sa Us

Can any of the company-specific risk be diversified away by investing in both Pfizer and Sa Us 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 Sa Us into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Pfizer Inc and Sa Mkt Fd, you can compare the effects of market volatilities on Pfizer and Sa Us 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 Sa Us. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and Sa Us.

Diversification Opportunities for Pfizer and Sa Us

-0.62

Correlation Coefficient

Pfizer  Sa Us

Excellent diversification

The 3 months correlation between Pfizer and SAMKX is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and Sa Mkt Fd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sa Mkt Fd 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 Sa Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sa Mkt Fd has no effect on the direction of Pfizer i.e., Pfizer and Sa Us go up and down completely randomly.

Pair Corralation between Pfizer and Sa Us

Considering the 90-day investment horizon Pfizer Inc is expected to under-perform the Sa Us. In addition to that, Pfizer is 2.03 times more volatile than Sa Mkt Fd. It trades about -0.14 of its total potential returns per unit of risk. Sa Mkt Fd is currently generating about 0.14 per unit of volatility. If you would invest  3,573  in Sa Mkt Fd on August 31, 2024 and sell it today you would earn a total of  156.00  from holding Sa Mkt Fd or generate 4.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Pfizer Inc  vs.  Sa Mkt Fd

Pfizer Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pfizer Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest sluggish performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Sa Mkt Fd

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sa Mkt Fd are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward-looking signals, Sa Us may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Pfizer and Sa Us

The main advantage of trading using opposite Pfizer and Sa Us positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, Sa Us 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 Sa Us will offset losses from the drop in Sa Us' long position.

The idea behind Pfizer Inc and Sa Mkt Fd pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.