Correlation Between Pfizer and Humbl

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

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

Diversification Opportunities for Pfizer and Humbl

-0.41

Correlation Coefficient

Pfizer  Humbl

Very good diversification

The 3 months correlation between Pfizer and Humbl is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and Humbl Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humbl Inc 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 Humbl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Humbl Inc has no effect on the direction of Pfizer i.e., Pfizer and Humbl go up and down completely randomly.

Pair Corralation between Pfizer and Humbl

Considering the 90-day investment horizon Pfizer Inc is expected to under-perform the Humbl. But the stock apears to be less risky and, when comparing its historical volatility, Pfizer Inc is 21.53 times less risky than Humbl. The stock trades about -0.08 of its potential returns per unit of risk. The Humbl Inc is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  0.03  in Humbl Inc on October 23, 2024 and sell it today you would earn a total of  0.06  from holding Humbl Inc or generate 200.0% return on investment over 90 days.

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

Pfizer Inc  vs.  Humbl Inc

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 unsteady 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.

Humbl Inc

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Humbl Inc are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite quite weak fundamental drivers, Humbl disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pfizer and Humbl

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

The idea behind Pfizer Inc and Humbl Inc 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.