Correlation Between Pfizer and Cenovus

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

By analyzing existing cross correlation between Pfizer Inc and Cenovus Energy 425, you can compare the effects of market volatilities on Pfizer and Cenovus 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 Cenovus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and Cenovus.

Diversification Opportunities for Pfizer and Cenovus

0.0

Correlation Coefficient

Pfizer  Cenovus

Pay attention - limited upside

The 3 months correlation between Pfizer and Cenovus is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and Cenovus Energy 425 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cenovus Energy 425 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 Cenovus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cenovus Energy 425 has no effect on the direction of Pfizer i.e., Pfizer and Cenovus go up and down completely randomly.

Pair Corralation between Pfizer and Cenovus

If you would invest  2,672  in Pfizer Inc on October 9, 2024 and sell it today you would earn a total of  17.00  from holding Pfizer Inc or generate 0.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	2.56%
Values	Daily Returns

Pfizer Inc  vs.  Cenovus Energy 425

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 abnormal 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.

Cenovus Energy 425

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cenovus Energy 425 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Cenovus 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 Cenovus

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

The idea behind Pfizer Inc and Cenovus Energy 425 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.

Check out your portfolio center.

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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.