Correlation Between Pfizer and Energem Corp

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

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

Diversification Opportunities for Pfizer and Energem Corp

0.0

Correlation Coefficient

Pfizer  Energem Corp

Pay attention - limited upside

The 3 months correlation between Pfizer and Energem is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and Energem Corp Warrant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energem Corp Warrant 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 Energem Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energem Corp Warrant has no effect on the direction of Pfizer i.e., Pfizer and Energem Corp go up and down completely randomly.

Pair Corralation between Pfizer and Energem Corp

Considering the 90-day investment horizon Pfizer Inc is expected to generate 0.21 times more return on investment than Energem Corp. However, Pfizer Inc is 4.86 times less risky than Energem Corp. It trades about -0.05 of its potential returns per unit of risk. Energem Corp Warrant is currently generating about -0.11 per unit of risk. If you would invest  3,962  in Pfizer Inc on October 21, 2024 and sell it today you would lose (1,332) from holding Pfizer Inc or give up 33.62% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	8.47%
Values	Daily Returns

Pfizer Inc  vs.  Energem Corp Warrant

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 weak 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.

Energem Corp Warrant

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Energem Corp Warrant has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Energem Corp is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Pfizer and Energem Corp

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

The idea behind Pfizer Inc and Energem Corp Warrant 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.

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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.