Correlation Between Pfizer and Ballast SmallMid

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

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

Diversification Opportunities for Pfizer and Ballast SmallMid

0.13

Correlation Coefficient

Pfizer  Ballast SmallMid

Average diversification

The 3 months correlation between Pfizer and Ballast is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and Ballast SmallMid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ballast SmallMid Cap 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 Ballast SmallMid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ballast SmallMid Cap has no effect on the direction of Pfizer i.e., Pfizer and Ballast SmallMid go up and down completely randomly.

Pair Corralation between Pfizer and Ballast SmallMid

Considering the 90-day investment horizon Pfizer Inc is expected to generate 1.06 times more return on investment than Ballast SmallMid. However, Pfizer is 1.06 times more volatile than Ballast SmallMid Cap. It trades about -0.04 of its potential returns per unit of risk. Ballast SmallMid Cap is currently generating about -0.11 per unit of risk. If you would invest  2,599  in Pfizer Inc on December 28, 2024 and sell it today you would lose (78.00) from holding Pfizer Inc or give up 3.0% of portfolio value over 90 days.

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

Pfizer Inc  vs.  Ballast SmallMid Cap

Pfizer Inc

Risk-Adjusted Performance

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 rather sound technical and fundamental indicators, Pfizer is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Ballast SmallMid Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ballast SmallMid Cap has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Etf's primary indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the exchange-traded fund private investors.

Pair Trading with Pfizer and Ballast SmallMid

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

The idea behind Pfizer Inc and Ballast SmallMid Cap 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.