Correlation Between Flexible Solutions and PFIZER

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

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

Diversification Opportunities for Flexible Solutions and PFIZER

0.14

Correlation Coefficient

Flexible Solutions  PFIZER

Average diversification

The 3 months correlation between Flexible and PFIZER is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Flexible Solutions Internation and PFIZER INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PFIZER INC and Flexible Solutions 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 Flexible Solutions International 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 has no effect on the direction of Flexible Solutions i.e., Flexible Solutions and PFIZER go up and down completely randomly.

Pair Corralation between Flexible Solutions and PFIZER

Considering the 90-day investment horizon Flexible Solutions International is expected to generate 7.36 times more return on investment than PFIZER. However, Flexible Solutions is 7.36 times more volatile than PFIZER INC. It trades about 0.05 of its potential returns per unit of risk. PFIZER INC is currently generating about 0.01 per unit of risk. If you would invest  298.00  in Flexible Solutions International on October 21, 2024 and sell it today you would earn a total of  287.00  from holding Flexible Solutions International or generate 96.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	94.76%
Values	Daily Returns

Flexible Solutions Internation  vs.  PFIZER INC

Flexible Solutions

Risk-Adjusted Performance

11 of 100

Good

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

PFIZER INC

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PFIZER INC are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, PFIZER is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Flexible Solutions and PFIZER

The main advantage of trading using opposite Flexible Solutions and PFIZER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flexible Solutions 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 Flexible Solutions International and PFIZER INC 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.

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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.