Correlation Between Pfizer and Squarespace

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

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

Diversification Opportunities for Pfizer and Squarespace

0.0

Correlation Coefficient

Pfizer  Squarespace

Pay attention - limited upside

The 3 months correlation between Pfizer and Squarespace is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and Squarespace in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Squarespace 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 Squarespace. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Squarespace has no effect on the direction of Pfizer i.e., Pfizer and Squarespace go up and down completely randomly.

Pair Corralation between Pfizer and Squarespace

If you would invest (100.00) in Squarespace on November 28, 2024 and sell it today you would earn a total of  100.00  from holding Squarespace or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Pfizer Inc  vs.  Squarespace

Pfizer Inc

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Pfizer Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. 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.

Squarespace

Risk-Adjusted Performance

Very Weak

Over the last 90 days Squarespace has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Squarespace is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Pfizer and Squarespace

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

The idea behind Pfizer Inc and Squarespace 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.