Correlation Between Pfizer and Invesco High

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

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

Diversification Opportunities for Pfizer and Invesco High

-0.7

Correlation Coefficient

Pfizer  Invesco High

Excellent diversification

The 3 months correlation between Pfizer and Invesco is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and Invesco High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco High Yield 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 Invesco High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco High Yield has no effect on the direction of Pfizer i.e., Pfizer and Invesco High go up and down completely randomly.

Pair Corralation between Pfizer and Invesco High

Considering the 90-day investment horizon Pfizer Inc is expected to generate 6.67 times more return on investment than Invesco High. However, Pfizer is 6.67 times more volatile than Invesco High Yield. It trades about 0.1 of its potential returns per unit of risk. Invesco High Yield is currently generating about -0.12 per unit of risk. If you would invest  2,610  in Pfizer Inc on October 10, 2024 and sell it today you would earn a total of  76.00  from holding Pfizer Inc or generate 2.91% return on investment over 90 days.

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

Pfizer Inc  vs.  Invesco High Yield

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 uncertain 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.

Invesco High Yield

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco High Yield are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Invesco High is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Pfizer and Invesco High

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

The idea behind Pfizer Inc and Invesco High Yield 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.