Correlation Between Pfizer and Global X

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

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

Diversification Opportunities for Pfizer and Global X

0.46

Correlation Coefficient

Pfizer  Global X

Very weak diversification

The 3 months correlation between Pfizer and Global is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and Global X Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Copper 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 Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Copper has no effect on the direction of Pfizer i.e., Pfizer and Global X go up and down completely randomly.

Pair Corralation between Pfizer and Global X

Considering the 90-day investment horizon Pfizer Inc is expected to under-perform the Global X. But the stock apears to be less risky and, when comparing its historical volatility, Pfizer Inc is 1.08 times less risky than Global X. The stock trades about -0.02 of its potential returns per unit of risk. The Global X Copper is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  3,893  in Global X Copper on October 27, 2024 and sell it today you would earn a total of  101.00  from holding Global X Copper or generate 2.59% return on investment over 90 days.

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

Pfizer Inc  vs.  Global X Copper

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.

Global X Copper

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global X Copper has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Etf's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the ETF investors.

Pair Trading with Pfizer and Global X

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

The idea behind Pfizer Inc and Global X Copper 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.