Correlation Between First Merchants and PFIZER
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By analyzing existing cross correlation between First Merchants and PFIZER INC 3, you can compare the effects of market volatilities on First Merchants 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 First Merchants with a short position of PFIZER. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Merchants and PFIZER.
Diversification Opportunities for First Merchants and PFIZER
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and PFIZER is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding First Merchants and PFIZER INC 3 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PFIZER INC 3 and First Merchants 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 First Merchants 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 3 has no effect on the direction of First Merchants i.e., First Merchants and PFIZER go up and down completely randomly.
Pair Corralation between First Merchants and PFIZER
Given the investment horizon of 90 days First Merchants is expected to generate 3.77 times more return on investment than PFIZER. However, First Merchants is 3.77 times more volatile than PFIZER INC 3. It trades about 0.08 of its potential returns per unit of risk. PFIZER INC 3 is currently generating about -0.04 per unit of risk. If you would invest 3,667 in First Merchants on September 24, 2024 and sell it today you would earn a total of 422.00 from holding First Merchants or generate 11.51% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 96.92% |
Values | Daily Returns |
First Merchants vs. PFIZER INC 3
Performance |
Timeline |
First Merchants |
PFIZER INC 3 |
First Merchants and PFIZER Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with First Merchants and PFIZER
The main advantage of trading using opposite First Merchants and PFIZER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Merchants 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.First Merchants vs. Home Federal Bancorp | First Merchants vs. First Northwest Bancorp | First Merchants vs. HomeTrust Bancshares | First Merchants vs. Lake Shore Bancorp |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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