Correlation Between Pfizer and FG Acquisition
Can any of the company-specific risk be diversified away by investing in both Pfizer and FG Acquisition 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 FG Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pfizer Inc CDR and FG Acquisition Corp, you can compare the effects of market volatilities on Pfizer and FG Acquisition 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 FG Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and FG Acquisition.
Diversification Opportunities for Pfizer and FG Acquisition
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Pfizer and FGAA-U is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc CDR and FG Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FG Acquisition Corp 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 CDR are associated (or correlated) with FG Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FG Acquisition Corp has no effect on the direction of Pfizer i.e., Pfizer and FG Acquisition go up and down completely randomly.
Pair Corralation between Pfizer and FG Acquisition
Assuming the 90 days trading horizon Pfizer Inc CDR is expected to under-perform the FG Acquisition. In addition to that, Pfizer is 2.34 times more volatile than FG Acquisition Corp. It trades about 0.0 of its total potential returns per unit of risk. FG Acquisition Corp is currently generating about 0.23 per unit of volatility. If you would invest 1,019 in FG Acquisition Corp on September 24, 2024 and sell it today you would earn a total of 159.00 from holding FG Acquisition Corp or generate 15.6% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 86.4% |
Values | Daily Returns |
Pfizer Inc CDR vs. FG Acquisition Corp
Performance |
Timeline |
Pfizer Inc CDR |
FG Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Pfizer and FG Acquisition Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Pfizer and FG Acquisition
The main advantage of trading using opposite Pfizer and FG Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, FG Acquisition 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 FG Acquisition will offset losses from the drop in FG Acquisition's long position.Pfizer vs. Metalero Mining Corp | Pfizer vs. Guru Organic Energy | Pfizer vs. Brookfield Office Properties | Pfizer vs. Goodfood Market Corp |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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