Correlation Between Pfizer and 1248EPBR3

Can any of the company-specific risk be diversified away by investing in both Pfizer and 1248EPBR3 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 1248EPBR3 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Pfizer Inc and CCO Holdings 55, you can compare the effects of market volatilities on Pfizer and 1248EPBR3 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 1248EPBR3. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and 1248EPBR3.

Diversification Opportunities for Pfizer and 1248EPBR3

0.25

Correlation Coefficient

Pfizer  1248EPBR3

Modest diversification

The 3 months correlation between Pfizer and 1248EPBR3 is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and CCO Holdings 55 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CCO Holdings 55 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 1248EPBR3. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CCO Holdings 55 has no effect on the direction of Pfizer i.e., Pfizer and 1248EPBR3 go up and down completely randomly.

Pair Corralation between Pfizer and 1248EPBR3

Considering the 90-day investment horizon Pfizer Inc is expected to under-perform the 1248EPBR3. In addition to that, Pfizer is 2.64 times more volatile than CCO Holdings 55. It trades about -0.1 of its total potential returns per unit of risk. CCO Holdings 55 is currently generating about -0.12 per unit of volatility. If you would invest  9,975  in CCO Holdings 55 on September 5, 2024 and sell it today you would lose (350.00) from holding CCO Holdings 55 or give up 3.51% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	82.81%
Values	Daily Returns

Pfizer Inc  vs.  CCO Holdings 55

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 weak 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.

CCO Holdings 55

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CCO Holdings 55 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, 1248EPBR3 is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Pfizer and 1248EPBR3

The main advantage of trading using opposite Pfizer and 1248EPBR3 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, 1248EPBR3 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 1248EPBR3 will offset losses from the drop in 1248EPBR3's long position.

The idea behind Pfizer Inc and CCO Holdings 55 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.