Correlation Between Pfizer and AB International

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

By analyzing existing cross correlation between Pfizer Inc and AB International Group, you can compare the effects of market volatilities on Pfizer and AB International 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 AB International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and AB International.

Diversification Opportunities for Pfizer and AB International

0.29

Correlation Coefficient

Pfizer  AB International

Modest diversification

The 3 months correlation between Pfizer and ABQQ is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and AB International Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AB International 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 AB International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AB International has no effect on the direction of Pfizer i.e., Pfizer and AB International go up and down completely randomly.

Pair Corralation between Pfizer and AB International

Considering the 90-day investment horizon Pfizer Inc is expected to under-perform the AB International. But the stock apears to be less risky and, when comparing its historical volatility, Pfizer Inc is 20.71 times less risky than AB International. The stock trades about -0.06 of its potential returns per unit of risk. The AB International Group is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  0.09  in AB International Group on December 27, 2024 and sell it today you would lose (0.07) from holding AB International Group or give up 77.78% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

Pfizer Inc  vs.  AB International Group

Pfizer Inc

Risk-Adjusted Performance

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 rather sound technical and fundamental indicators, Pfizer is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

AB International

Risk-Adjusted Performance

Very Weak

Over the last 90 days AB International Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively inconsistent basic indicators, AB International reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pfizer and AB International

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

The idea behind Pfizer Inc and AB International Group 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.