Correlation Between Pfizer and Townsquare Media
Can any of the company-specific risk be diversified away by investing in both Pfizer and Townsquare Media 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 Townsquare Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pfizer Inc and Townsquare Media, you can compare the effects of market volatilities on Pfizer and Townsquare Media 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 Townsquare Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and Townsquare Media.
Diversification Opportunities for Pfizer and Townsquare Media
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Pfizer and Townsquare is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and Townsquare Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Townsquare Media 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 Townsquare Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Townsquare Media has no effect on the direction of Pfizer i.e., Pfizer and Townsquare Media go up and down completely randomly.
Pair Corralation between Pfizer and Townsquare Media
Assuming the 90 days trading horizon Pfizer Inc is expected to generate 0.47 times more return on investment than Townsquare Media. However, Pfizer Inc is 2.11 times less risky than Townsquare Media. It trades about 0.18 of its potential returns per unit of risk. Townsquare Media is currently generating about 0.06 per unit of risk. If you would invest 2,494 in Pfizer Inc on October 9, 2024 and sell it today you would earn a total of 108.00 from holding Pfizer Inc or generate 4.33% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Pfizer Inc vs. Townsquare Media
Performance |
Timeline |
Pfizer Inc |
Townsquare Media |
Pfizer and Townsquare Media Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Pfizer and Townsquare Media
The main advantage of trading using opposite Pfizer and Townsquare Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, Townsquare Media 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 Townsquare Media will offset losses from the drop in Townsquare Media's long position.Pfizer vs. PARKEN Sport Entertainment | Pfizer vs. Yuexiu Transport Infrastructure | Pfizer vs. Transport International Holdings | Pfizer vs. Discover Financial Services |
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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