Correlation Between Arizona Gold and Pfizer

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

By analyzing existing cross correlation between Arizona Gold Silver and Pfizer Inc CDR, you can compare the effects of market volatilities on Arizona Gold 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 Arizona Gold with a short position of Pfizer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arizona Gold and Pfizer.

Diversification Opportunities for Arizona Gold and Pfizer

0.23

Correlation Coefficient

Arizona Gold  Pfizer

Modest diversification

The 3 months correlation between Arizona and Pfizer is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Arizona Gold Silver and Pfizer Inc CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pfizer Inc CDR and Arizona Gold 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 Arizona Gold Silver 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 CDR has no effect on the direction of Arizona Gold i.e., Arizona Gold and Pfizer go up and down completely randomly.

Pair Corralation between Arizona Gold and Pfizer

Assuming the 90 days horizon Arizona Gold Silver is expected to under-perform the Pfizer. In addition to that, Arizona Gold is 4.92 times more volatile than Pfizer Inc CDR. It trades about -0.06 of its total potential returns per unit of risk. Pfizer Inc CDR is currently generating about -0.01 per unit of volatility. If you would invest  1,222  in Pfizer Inc CDR on December 23, 2024 and sell it today you would lose (10.00) from holding Pfizer Inc CDR or give up 0.82% of portfolio value over 90 days.

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

Arizona Gold Silver  vs.  Pfizer Inc CDR

Arizona Gold Silver

Risk-Adjusted Performance

Very Weak

Over the last 90 days Arizona Gold Silver has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pfizer Inc CDR

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pfizer Inc CDR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Pfizer is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Arizona Gold and Pfizer

The main advantage of trading using opposite Arizona Gold and Pfizer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arizona Gold 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.

The idea behind Arizona Gold Silver and Pfizer Inc CDR 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.