Correlation Between Pfizer and Dah Sing
Can any of the company-specific risk be diversified away by investing in both Pfizer and Dah Sing 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 Dah Sing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pfizer Inc and Dah Sing Financial, you can compare the effects of market volatilities on Pfizer and Dah Sing 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 Dah Sing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and Dah Sing.
Diversification Opportunities for Pfizer and Dah Sing
Average diversification
The 3 months correlation between Pfizer and Dah is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and Dah Sing Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dah Sing Financial 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 Dah Sing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dah Sing Financial has no effect on the direction of Pfizer i.e., Pfizer and Dah Sing go up and down completely randomly.
Pair Corralation between Pfizer and Dah Sing
Considering the 90-day investment horizon Pfizer is expected to generate 18.96 times less return on investment than Dah Sing. In addition to that, Pfizer is 1.49 times more volatile than Dah Sing Financial. It trades about 0.01 of its total potential returns per unit of risk. Dah Sing Financial is currently generating about 0.17 per unit of volatility. If you would invest 1,040 in Dah Sing Financial on December 26, 2024 and sell it today you would earn a total of 87.00 from holding Dah Sing Financial or generate 8.37% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 98.36% |
Values | Daily Returns |
Pfizer Inc vs. Dah Sing Financial
Performance |
Timeline |
Pfizer Inc |
Dah Sing Financial |
Pfizer and Dah Sing Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Pfizer and Dah Sing
The main advantage of trading using opposite Pfizer and Dah Sing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, Dah Sing 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 Dah Sing will offset losses from the drop in Dah Sing's long position.Pfizer vs. AbbVie Inc | Pfizer vs. Merck Company | Pfizer vs. Eli Lilly and | Pfizer vs. Bristol Myers Squibb |
Dah Sing vs. First Bancorp | Dah Sing vs. Franklin Financial Services | Dah Sing vs. National Bank Holdings | Dah Sing vs. Bankwell Financial Group |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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