Correlation Between Pfizer and Greencity Acquisition

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

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

Diversification Opportunities for Pfizer and Greencity Acquisition

-0.57

Correlation Coefficient

Pfizer  Greencity Acquisition

Excellent diversification

The 3 months correlation between Pfizer and Greencity is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and Greencity Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greencity Acquisition 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 Greencity Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greencity Acquisition has no effect on the direction of Pfizer i.e., Pfizer and Greencity Acquisition go up and down completely randomly.

Pair Corralation between Pfizer and Greencity Acquisition

Considering the 90-day investment horizon Pfizer Inc is expected to under-perform the Greencity Acquisition. But the stock apears to be less risky and, when comparing its historical volatility, Pfizer Inc is 17.37 times less risky than Greencity Acquisition. The stock trades about -0.05 of its potential returns per unit of risk. The Greencity Acquisition is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  2.00  in Greencity Acquisition on September 17, 2024 and sell it today you would lose (0.38) from holding Greencity Acquisition or give up 19.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	8.33%
Values	Daily Returns

Pfizer Inc  vs.  Greencity Acquisition

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 uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Greencity Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Greencity Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Greencity Acquisition 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 Greencity Acquisition

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

The idea behind Pfizer Inc and Greencity Acquisition 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 Stocks Directory module to find actively traded stocks across global markets.