Correlation Between Pfizer and Intermediate Capital
Can any of the company-specific risk be diversified away by investing in both Pfizer and Intermediate Capital 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 Intermediate Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pfizer Inc and Intermediate Capital Group, you can compare the effects of market volatilities on Pfizer and Intermediate Capital 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 Intermediate Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and Intermediate Capital.
Diversification Opportunities for Pfizer and Intermediate Capital
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pfizer and Intermediate is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and Intermediate Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intermediate Capital 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 Intermediate Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intermediate Capital has no effect on the direction of Pfizer i.e., Pfizer and Intermediate Capital go up and down completely randomly.
Pair Corralation between Pfizer and Intermediate Capital
Considering the 90-day investment horizon Pfizer Inc is expected to under-perform the Intermediate Capital. In addition to that, Pfizer is 1.06 times more volatile than Intermediate Capital Group. It trades about -0.07 of its total potential returns per unit of risk. Intermediate Capital Group is currently generating about 0.13 per unit of volatility. If you would invest 2,438 in Intermediate Capital Group on October 8, 2024 and sell it today you would earn a total of 276.00 from holding Intermediate Capital Group or generate 11.32% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.41% |
Values | Daily Returns |
Pfizer Inc vs. Intermediate Capital Group
Performance |
Timeline |
Pfizer Inc |
Intermediate Capital |
Pfizer and Intermediate Capital Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Pfizer and Intermediate Capital
The main advantage of trading using opposite Pfizer and Intermediate Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, Intermediate Capital 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 Intermediate Capital will offset losses from the drop in Intermediate Capital's long position.Pfizer vs. AbbVie Inc | Pfizer vs. Merck Company | Pfizer vs. Eli Lilly and | Pfizer vs. Bristol Myers Squibb |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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