Correlation Between Pfizer and BC Technology

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

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

Diversification Opportunities for Pfizer and BC Technology

-0.83

Correlation Coefficient

Pfizer  BC Technology

Pay attention - limited upside

The 3 months correlation between Pfizer and BCTCF is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and BC Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BC Technology 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 BC Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BC Technology Group has no effect on the direction of Pfizer i.e., Pfizer and BC Technology go up and down completely randomly.

Pair Corralation between Pfizer and BC Technology

If you would invest  2,610  in Pfizer Inc on October 9, 2024 and sell it today you would earn a total of  79.00  from holding Pfizer Inc or generate 3.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	95.0%
Values	Daily Returns

Pfizer Inc  vs.  BC Technology Group

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.

BC Technology Group

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BC Technology Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental indicators, BC Technology reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pfizer and BC Technology

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

The idea behind Pfizer Inc and BC Technology 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 CEOs Directory module to screen CEOs from public companies around the world.