Correlation Between Pfizer and Strategy Shares

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

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

Diversification Opportunities for Pfizer and Strategy Shares

-0.77

Correlation Coefficient

Pfizer  Strategy Shares

Pay attention - limited upside

The 3 months correlation between Pfizer and Strategy is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and Strategy Shares NewfoundReSolv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategy Shares Newf 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 Strategy Shares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategy Shares Newf has no effect on the direction of Pfizer i.e., Pfizer and Strategy Shares go up and down completely randomly.

Pair Corralation between Pfizer and Strategy Shares

Considering the 90-day investment horizon Pfizer Inc is expected to under-perform the Strategy Shares. In addition to that, Pfizer is 2.19 times more volatile than Strategy Shares NewfoundReSolve. It trades about -0.16 of its total potential returns per unit of risk. Strategy Shares NewfoundReSolve is currently generating about 0.15 per unit of volatility. If you would invest  3,082  in Strategy Shares NewfoundReSolve on September 15, 2024 and sell it today you would earn a total of  187.00  from holding Strategy Shares NewfoundReSolve or generate 6.07% return on investment over 90 days.

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

Pfizer Inc  vs.  Strategy Shares NewfoundReSolv

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 uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Strategy Shares Newf

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Strategy Shares NewfoundReSolve are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy primary indicators, Strategy Shares is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Pfizer and Strategy Shares

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

The idea behind Pfizer Inc and Strategy Shares NewfoundReSolve 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.