Correlation Between Pfizer and Cushing Mlp

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

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

Diversification Opportunities for Pfizer and Cushing Mlp

-0.17

Correlation Coefficient

Pfizer  Cushing Mlp

Good diversification

The 3 months correlation between Pfizer and Cushing is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and Cushing Mlp Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cushing Mlp Total 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 Cushing Mlp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cushing Mlp Total has no effect on the direction of Pfizer i.e., Pfizer and Cushing Mlp go up and down completely randomly.

Pair Corralation between Pfizer and Cushing Mlp

Considering the 90-day investment horizon Pfizer Inc is expected to under-perform the Cushing Mlp. But the stock apears to be less risky and, when comparing its historical volatility, Pfizer Inc is 1.23 times less risky than Cushing Mlp. The stock trades about -0.05 of its potential returns per unit of risk. The Cushing Mlp Total is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  4,276  in Cushing Mlp Total on December 29, 2024 and sell it today you would earn a total of  131.00  from holding Cushing Mlp Total or generate 3.06% 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.  Cushing Mlp Total

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.

Cushing Mlp Total

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Cushing Mlp Total are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly stable basic indicators, Cushing Mlp is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Pfizer and Cushing Mlp

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

The idea behind Pfizer Inc and Cushing Mlp Total 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.