Correlation Between Pfizer and Oberweis International

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

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

Diversification Opportunities for Pfizer and Oberweis International

-0.25

Correlation Coefficient

Pfizer  Oberweis International

Very good diversification

The 3 months correlation between Pfizer and Oberweis is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and Oberweis International Opportu in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oberweis International 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 Oberweis International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oberweis International has no effect on the direction of Pfizer i.e., Pfizer and Oberweis International go up and down completely randomly.

Pair Corralation between Pfizer and Oberweis International

Considering the 90-day investment horizon Pfizer Inc is expected to under-perform the Oberweis International. In addition to that, Pfizer is 1.12 times more volatile than Oberweis International Opportunities. It trades about -0.05 of its total potential returns per unit of risk. Oberweis International Opportunities is currently generating about 0.09 per unit of volatility. If you would invest  1,856  in Oberweis International Opportunities on December 29, 2024 and sell it today you would earn a total of  103.00  from holding Oberweis International Opportunities or generate 5.55% return on investment over 90 days.

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

Pfizer Inc  vs.  Oberweis International Opportu

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 latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Oberweis International

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Oberweis International Opportunities are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Oberweis International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Pfizer and Oberweis International

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

The idea behind Pfizer Inc and Oberweis International Opportunities 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.

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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.