Correlation Between Contango ORE and PFIZER

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

By analyzing existing cross correlation between Contango ORE and PFIZER INC 4125, you can compare the effects of market volatilities on Contango ORE 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 Contango ORE with a short position of PFIZER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Contango ORE and PFIZER.

Diversification Opportunities for Contango ORE and PFIZER

-0.37

Correlation Coefficient

Contango ORE  PFIZER

Very good diversification

The 3 months correlation between Contango and PFIZER is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Contango ORE and PFIZER INC 4125 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PFIZER INC 4125 and Contango ORE 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 Contango ORE 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 4125 has no effect on the direction of Contango ORE i.e., Contango ORE and PFIZER go up and down completely randomly.

Pair Corralation between Contango ORE and PFIZER

Given the investment horizon of 90 days Contango ORE is expected to under-perform the PFIZER. In addition to that, Contango ORE is 2.27 times more volatile than PFIZER INC 4125. It trades about 0.0 of its total potential returns per unit of risk. PFIZER INC 4125 is currently generating about 0.15 per unit of volatility. If you would invest  8,029  in PFIZER INC 4125 on December 24, 2024 and sell it today you would earn a total of  1,200  from holding PFIZER INC 4125 or generate 14.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.72%
Values	Daily Returns

Contango ORE  vs.  PFIZER INC 4125

Contango ORE

Risk-Adjusted Performance

Very Weak

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

PFIZER INC 4125

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PFIZER INC 4125 are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, PFIZER sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Contango ORE and PFIZER

The main advantage of trading using opposite Contango ORE and PFIZER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Contango ORE 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 Contango ORE and PFIZER INC 4125 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 Commodity Directory module to find actively traded commodities issued by global exchanges.