Correlation Between Citigroup and PFIZER
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By analyzing existing cross correlation between Citigroup and PFIZER INC 43, you can compare the effects of market volatilities on Citigroup 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 Citigroup with a short position of PFIZER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and PFIZER.
Diversification Opportunities for Citigroup and PFIZER
Excellent diversification
The 3 months correlation between Citigroup and PFIZER is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and PFIZER INC 43 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PFIZER INC 43 and Citigroup 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 Citigroup 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 43 has no effect on the direction of Citigroup i.e., Citigroup and PFIZER go up and down completely randomly.
Pair Corralation between Citigroup and PFIZER
Taking into account the 90-day investment horizon Citigroup is expected to generate 38.48 times less return on investment than PFIZER. But when comparing it to its historical volatility, Citigroup is 42.78 times less risky than PFIZER. It trades about 0.07 of its potential returns per unit of risk. PFIZER INC 43 is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 9,395 in PFIZER INC 43 on September 24, 2024 and sell it today you would lose (762.00) from holding PFIZER INC 43 or give up 8.11% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 83.1% |
Values | Daily Returns |
Citigroup vs. PFIZER INC 43
Performance |
Timeline |
Citigroup |
PFIZER INC 43 |
Citigroup and PFIZER Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Citigroup and PFIZER
The main advantage of trading using opposite Citigroup and PFIZER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup 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 Citigroup and PFIZER INC 43 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.PFIZER vs. Yuexiu Transport Infrastructure | PFIZER vs. Delek Logistics Partners | PFIZER vs. National CineMedia | PFIZER vs. Emerson Radio |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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