Correlation Between Pfizer and CleanGo Innovations

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

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

Diversification Opportunities for Pfizer and CleanGo Innovations

-0.18

Correlation Coefficient

Pfizer  CleanGo Innovations

Good diversification

The 3 months correlation between Pfizer and CleanGo is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and CleanGo Innovations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CleanGo Innovations 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 CleanGo Innovations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CleanGo Innovations has no effect on the direction of Pfizer i.e., Pfizer and CleanGo Innovations go up and down completely randomly.

Pair Corralation between Pfizer and CleanGo Innovations

Considering the 90-day investment horizon Pfizer Inc is expected to generate 0.19 times more return on investment than CleanGo Innovations. However, Pfizer Inc is 5.34 times less risky than CleanGo Innovations. It trades about -0.15 of its potential returns per unit of risk. CleanGo Innovations is currently generating about -0.24 per unit of risk. If you would invest  2,674  in Pfizer Inc on October 25, 2024 and sell it today you would lose (73.00) from holding Pfizer Inc or give up 2.73% of portfolio value over 90 days.

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

Pfizer Inc  vs.  CleanGo Innovations

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 conflicting 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.

CleanGo Innovations

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CleanGo Innovations has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Pfizer and CleanGo Innovations

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

The idea behind Pfizer Inc and CleanGo Innovations 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.