Correlation Between Pfizer and Aptorum Group

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

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

Diversification Opportunities for Pfizer and Aptorum Group

0.71

Correlation Coefficient

Pfizer  Aptorum Group

Poor diversification

The 3 months correlation between Pfizer and Aptorum is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and Aptorum Group Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aptorum Group 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 Aptorum Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aptorum Group has no effect on the direction of Pfizer i.e., Pfizer and Aptorum Group go up and down completely randomly.

Pair Corralation between Pfizer and Aptorum Group

Considering the 90-day investment horizon Pfizer Inc is expected to under-perform the Aptorum Group. But the stock apears to be less risky and, when comparing its historical volatility, Pfizer Inc is 18.8 times less risky than Aptorum Group. The stock trades about -0.05 of its potential returns per unit of risk. The Aptorum Group Ltd is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  500.00  in Aptorum Group Ltd on October 22, 2024 and sell it today you would lose (385.00) from holding Aptorum Group Ltd or give up 77.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.6%
Values	Daily Returns

Pfizer Inc  vs.  Aptorum Group Ltd

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 weak 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.

Aptorum Group

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Aptorum Group Ltd are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Aptorum Group displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pfizer and Aptorum Group

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

The idea behind Pfizer Inc and Aptorum Group Ltd 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.

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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.