Correlation Between Pfizer and Phoenix Biotech

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

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

Diversification Opportunities for Pfizer and Phoenix Biotech

-0.37

Correlation Coefficient

Pfizer  Phoenix Biotech

Very good diversification

The 3 months correlation between Pfizer and Phoenix is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and Phoenix Biotech Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phoenix Biotech Acqu 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 Phoenix Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phoenix Biotech Acqu has no effect on the direction of Pfizer i.e., Pfizer and Phoenix Biotech go up and down completely randomly.

Pair Corralation between Pfizer and Phoenix Biotech

Considering the 90-day investment horizon Pfizer Inc is expected to under-perform the Phoenix Biotech. In addition to that, Pfizer is 3.22 times more volatile than Phoenix Biotech Acquisition. It trades about -0.07 of its total potential returns per unit of risk. Phoenix Biotech Acquisition is currently generating about 0.09 per unit of volatility. If you would invest  1,028  in Phoenix Biotech Acquisition on September 19, 2024 and sell it today you would earn a total of  62.00  from holding Phoenix Biotech Acquisition or generate 6.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	28.43%
Values	Daily Returns

Pfizer Inc  vs.  Phoenix Biotech Acquisition

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.

Phoenix Biotech Acqu

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Phoenix Biotech Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Phoenix Biotech 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 Phoenix Biotech

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

The idea behind Pfizer Inc and Phoenix Biotech Acquisition 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.