Correlation Between Pfizer and Atlantic Coastal

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

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

Diversification Opportunities for Pfizer and Atlantic Coastal

-0.34

Correlation Coefficient

Pfizer  Atlantic Coastal

Very good diversification

The 3 months correlation between Pfizer and Atlantic is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and Atlantic Coastal Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlantic Coastal Acq 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 Atlantic Coastal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlantic Coastal Acq has no effect on the direction of Pfizer i.e., Pfizer and Atlantic Coastal go up and down completely randomly.

Pair Corralation between Pfizer and Atlantic Coastal

Considering the 90-day investment horizon Pfizer Inc is expected to generate 0.72 times more return on investment than Atlantic Coastal. However, Pfizer Inc is 1.39 times less risky than Atlantic Coastal. It trades about -0.02 of its potential returns per unit of risk. Atlantic Coastal Acquisition is currently generating about -0.03 per unit of risk. If you would invest  3,061  in Pfizer Inc on October 6, 2024 and sell it today you would lose (400.00) from holding Pfizer Inc or give up 13.07% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	89.0%
Values	Daily Returns

Pfizer Inc  vs.  Atlantic Coastal Acquisition

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 latest abnormal performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Atlantic Coastal Acq

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Atlantic Coastal Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's fundamental drivers remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Pfizer and Atlantic Coastal

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

The idea behind Pfizer Inc and Atlantic Coastal Acquisition 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.