Correlation Between NAKED WINES and Pfizer

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

By analyzing existing cross correlation between NAKED WINES PLC and Pfizer Inc, you can compare the effects of market volatilities on NAKED WINES 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 NAKED WINES with a short position of Pfizer. Check out your portfolio center. Please also check ongoing floating volatility patterns of NAKED WINES and Pfizer.

Diversification Opportunities for NAKED WINES and Pfizer

-0.12

Correlation Coefficient

NAKED WINES  Pfizer

Good diversification

The 3 months correlation between NAKED and Pfizer is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding NAKED WINES PLC and Pfizer Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pfizer Inc and NAKED WINES 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 NAKED WINES PLC 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 NAKED WINES i.e., NAKED WINES and Pfizer go up and down completely randomly.

Pair Corralation between NAKED WINES and Pfizer

Assuming the 90 days horizon NAKED WINES PLC is expected to generate 4.06 times more return on investment than Pfizer. However, NAKED WINES is 4.06 times more volatile than Pfizer Inc. It trades about 0.04 of its potential returns per unit of risk. Pfizer Inc is currently generating about -0.07 per unit of risk. If you would invest  53.00  in NAKED WINES PLC on October 26, 2024 and sell it today you would earn a total of  1.00  from holding NAKED WINES PLC or generate 1.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.74%
Values	Daily Returns

NAKED WINES PLC  vs.  Pfizer Inc

NAKED WINES PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NAKED WINES PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pfizer Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pfizer Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Pfizer is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with NAKED WINES and Pfizer

The main advantage of trading using opposite NAKED WINES and Pfizer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NAKED WINES 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 NAKED WINES PLC 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.

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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.