Correlation Between Pfizer and Mega Uranium

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

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

Diversification Opportunities for Pfizer and Mega Uranium

-0.47

Correlation Coefficient

Pfizer  Mega Uranium

Very good diversification

The 3 months correlation between Pfizer and Mega is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and Mega Uranium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mega Uranium 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 Mega Uranium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mega Uranium has no effect on the direction of Pfizer i.e., Pfizer and Mega Uranium go up and down completely randomly.

Pair Corralation between Pfizer and Mega Uranium

Considering the 90-day investment horizon Pfizer Inc is expected to generate 0.5 times more return on investment than Mega Uranium. However, Pfizer Inc is 2.02 times less risky than Mega Uranium. It trades about -0.04 of its potential returns per unit of risk. Mega Uranium is currently generating about -0.29 per unit of risk. If you would invest  2,620  in Pfizer Inc on December 4, 2024 and sell it today you would lose (28.00) from holding Pfizer Inc or give up 1.07% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Pfizer Inc  vs.  Mega Uranium

Pfizer Inc

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Pfizer Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Pfizer may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Mega Uranium

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mega Uranium has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Pfizer and Mega Uranium

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

The idea behind Pfizer Inc and Mega Uranium 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.