Correlation Between Vista Energy, and Pfizer

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

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

Diversification Opportunities for Vista Energy, and Pfizer

-0.83

Correlation Coefficient

Vista Energy,  Pfizer

Pay attention - limited upside

The 3 months correlation between Vista and Pfizer is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Vista Energy, SAB and Pfizer Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pfizer Inc and Vista Energy, 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 Vista Energy, SAB are associated (or correlated) with Pfizer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pfizer Inc has no effect on the direction of Vista Energy, i.e., Vista Energy, and Pfizer go up and down completely randomly.

Pair Corralation between Vista Energy, and Pfizer

Assuming the 90 days trading horizon Vista Energy, SAB is expected to generate 1.83 times more return on investment than Pfizer. However, Vista Energy, is 1.83 times more volatile than Pfizer Inc. It trades about 0.12 of its potential returns per unit of risk. Pfizer Inc is currently generating about -0.3 per unit of risk. If you would invest  1,640  in Vista Energy, SAB on September 15, 2024 and sell it today you would earn a total of  345.00  from holding Vista Energy, SAB or generate 21.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Vista Energy, SAB  vs.  Pfizer Inc

Vista Energy, SAB

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vista Energy, SAB are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, Vista Energy, sustained solid returns over the last few months and may actually be approaching a breakup point.

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. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Vista Energy, and Pfizer

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

The idea behind Vista Energy, SAB and Pfizer Inc 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.