Correlation Between Pfizer and Collegeadvantage

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

By analyzing existing cross correlation between Pfizer Inc and Collegeadvantage 529 Savings, you can compare the effects of market volatilities on Pfizer and Collegeadvantage 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 Collegeadvantage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and Collegeadvantage.

Diversification Opportunities for Pfizer and Collegeadvantage

-0.63

Correlation Coefficient

Pfizer  Collegeadvantage

Excellent diversification

The 3 months correlation between Pfizer and Collegeadvantage is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and Collegeadvantage 529 Savings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Collegeadvantage 529 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 Collegeadvantage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Collegeadvantage 529 has no effect on the direction of Pfizer i.e., Pfizer and Collegeadvantage go up and down completely randomly.

Pair Corralation between Pfizer and Collegeadvantage

Considering the 90-day investment horizon Pfizer Inc is expected to under-perform the Collegeadvantage. In addition to that, Pfizer is 1.16 times more volatile than Collegeadvantage 529 Savings. It trades about -0.08 of its total potential returns per unit of risk. Collegeadvantage 529 Savings is currently generating about 0.08 per unit of volatility. If you would invest  6,226  in Collegeadvantage 529 Savings on October 23, 2024 and sell it today you would earn a total of  345.00  from holding Collegeadvantage 529 Savings or generate 5.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Pfizer Inc  vs.  Collegeadvantage 529 Savings

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 unsteady 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.

Collegeadvantage 529

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Collegeadvantage 529 Savings are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Collegeadvantage is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Pfizer and Collegeadvantage

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

The idea behind Pfizer Inc and Collegeadvantage 529 Savings 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .