Correlation Between Pfizer and Gaucho Group

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

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

Diversification Opportunities for Pfizer and Gaucho Group

0.31

Correlation Coefficient

Pfizer  Gaucho Group

Weak diversification

The 3 months correlation between Pfizer and Gaucho is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and Gaucho Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaucho Group Holdings 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 Gaucho Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaucho Group Holdings has no effect on the direction of Pfizer i.e., Pfizer and Gaucho Group go up and down completely randomly.

Pair Corralation between Pfizer and Gaucho Group

Considering the 90-day investment horizon Pfizer Inc is expected to generate 0.12 times more return on investment than Gaucho Group. However, Pfizer Inc is 8.48 times less risky than Gaucho Group. It trades about -0.05 of its potential returns per unit of risk. Gaucho Group Holdings is currently generating about -0.2 per unit of risk. If you would invest  2,814  in Pfizer Inc on October 4, 2024 and sell it today you would lose (161.00) from holding Pfizer Inc or give up 5.72% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	58.73%
Values	Daily Returns

Pfizer Inc  vs.  Gaucho Group Holdings

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 rather sound technical and fundamental indicators, Pfizer is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Gaucho Group Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gaucho Group Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Pfizer and Gaucho Group

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

The idea behind Pfizer Inc and Gaucho Group Holdings 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.