Correlation Between Inflection Point and PFIZER

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

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

Diversification Opportunities for Inflection Point and PFIZER

0.36

Correlation Coefficient

Inflection Point  PFIZER

Weak diversification

The 3 months correlation between Inflection and PFIZER is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Inflection Point Acquisition 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 Inflection Point 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 Inflection Point Acquisition 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 Inflection Point i.e., Inflection Point and PFIZER go up and down completely randomly.

Pair Corralation between Inflection Point and PFIZER

Assuming the 90 days horizon Inflection Point Acquisition is expected to generate 3.22 times more return on investment than PFIZER. However, Inflection Point is 3.22 times more volatile than PFIZER INC 4125. It trades about 0.11 of its potential returns per unit of risk. PFIZER INC 4125 is currently generating about -0.09 per unit of risk. If you would invest  1,083  in Inflection Point Acquisition on September 25, 2024 and sell it today you would earn a total of  252.00  from holding Inflection Point Acquisition or generate 23.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	93.65%
Values	Daily Returns

Inflection Point Acquisition  vs.  PFIZER INC 4125

Inflection Point Acq

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Inflection Point Acquisition are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Inflection Point unveiled solid returns over the last few months and may actually be approaching a breakup point.

PFIZER INC 4125

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PFIZER INC 4125 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, PFIZER is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Inflection Point and PFIZER

The main advantage of trading using opposite Inflection Point and PFIZER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inflection Point 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 Inflection Point Acquisition 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.