Correlation Between Pfizer and Grupo Industrial

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

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

Diversification Opportunities for Pfizer and Grupo Industrial

-0.09

Correlation Coefficient

Pfizer  Grupo Industrial

Good diversification

The 3 months correlation between Pfizer and Grupo is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and Grupo Industrial Saltillo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Industrial Saltillo and Pfizer 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 Pfizer Inc are associated (or correlated) with Grupo Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Industrial Saltillo has no effect on the direction of Pfizer i.e., Pfizer and Grupo Industrial go up and down completely randomly.

Pair Corralation between Pfizer and Grupo Industrial

Assuming the 90 days trading horizon Pfizer Inc is expected to under-perform the Grupo Industrial. In addition to that, Pfizer is 1.17 times more volatile than Grupo Industrial Saltillo. It trades about -0.04 of its total potential returns per unit of risk. Grupo Industrial Saltillo is currently generating about 0.09 per unit of volatility. If you would invest  1,659  in Grupo Industrial Saltillo on October 25, 2024 and sell it today you would earn a total of  115.00  from holding Grupo Industrial Saltillo or generate 6.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Pfizer Inc  vs.  Grupo Industrial Saltillo

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 fairly strong technical and fundamental indicators, Pfizer is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Grupo Industrial Saltillo

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Grupo Industrial Saltillo are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Grupo Industrial may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Pfizer and Grupo Industrial

The main advantage of trading using opposite Pfizer and Grupo Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, Grupo Industrial 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 Grupo Industrial will offset losses from the drop in Grupo Industrial's long position.

The idea behind Pfizer Inc and Grupo Industrial Saltillo 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.