Correlation Between Pfizer and Jaws Hurricane

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Can any of the company-specific risk be diversified away by investing in both Pfizer and Jaws Hurricane 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 Jaws Hurricane into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pfizer Inc and Jaws Hurricane Acquisition, you can compare the effects of market volatilities on Pfizer and Jaws Hurricane 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 Jaws Hurricane. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and Jaws Hurricane.

Diversification Opportunities for Pfizer and Jaws Hurricane

-0.93
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Pfizer and Jaws is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and Jaws Hurricane Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jaws Hurricane Acqui 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 Jaws Hurricane. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jaws Hurricane Acqui has no effect on the direction of Pfizer i.e., Pfizer and Jaws Hurricane go up and down completely randomly.

Pair Corralation between Pfizer and Jaws Hurricane

Considering the 90-day investment horizon Pfizer Inc is expected to under-perform the Jaws Hurricane. In addition to that, Pfizer is 14.39 times more volatile than Jaws Hurricane Acquisition. It trades about -0.07 of its total potential returns per unit of risk. Jaws Hurricane Acquisition is currently generating about 0.23 per unit of volatility. If you would invest  996.00  in Jaws Hurricane Acquisition on September 18, 2024 and sell it today you would earn a total of  28.00  from holding Jaws Hurricane Acquisition or generate 2.81% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy23.99%
ValuesDaily Returns

Pfizer Inc  vs.  Jaws Hurricane Acquisition

 Performance 
       Timeline  
Pfizer Inc 

Risk-Adjusted Performance

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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.
Jaws Hurricane Acqui 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Jaws Hurricane Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Jaws Hurricane is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pfizer and Jaws Hurricane Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Pfizer and Jaws Hurricane

The main advantage of trading using opposite Pfizer and Jaws Hurricane positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, Jaws Hurricane 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 Jaws Hurricane will offset losses from the drop in Jaws Hurricane's long position.
The idea behind Pfizer Inc and Jaws Hurricane 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.

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