Correlation Between Pfizer and Oconee Financial

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

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

Diversification Opportunities for Pfizer and Oconee Financial

0.04

Correlation Coefficient

Pfizer  Oconee Financial

Significant diversification

The 3 months correlation between Pfizer and Oconee is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and Oconee Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oconee Financial 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 Oconee Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oconee Financial has no effect on the direction of Pfizer i.e., Pfizer and Oconee Financial go up and down completely randomly.

Pair Corralation between Pfizer and Oconee Financial

Considering the 90-day investment horizon Pfizer Inc is expected to under-perform the Oconee Financial. But the stock apears to be less risky and, when comparing its historical volatility, Pfizer Inc is 1.13 times less risky than Oconee Financial. The stock trades about -0.04 of its potential returns per unit of risk. The Oconee Financial is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  3,845  in Oconee Financial on December 28, 2024 and sell it today you would earn a total of  80.00  from holding Oconee Financial or generate 2.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Pfizer Inc  vs.  Oconee Financial

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.

Oconee Financial

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Oconee Financial are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental drivers, Oconee Financial is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Pfizer and Oconee Financial

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

The idea behind Pfizer Inc and Oconee Financial 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.