Correlation Between Viemed Healthcare and PFIZER

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

By analyzing existing cross correlation between Viemed Healthcare and PFIZER INC 43, you can compare the effects of market volatilities on Viemed Healthcare 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 Viemed Healthcare with a short position of PFIZER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Viemed Healthcare and PFIZER.

Diversification Opportunities for Viemed Healthcare and PFIZER

-0.49

Correlation Coefficient

Viemed Healthcare  PFIZER

Very good diversification

The 3 months correlation between Viemed and PFIZER is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Viemed Healthcare and PFIZER INC 43 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PFIZER INC 43 and Viemed Healthcare 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 Viemed Healthcare 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 43 has no effect on the direction of Viemed Healthcare i.e., Viemed Healthcare and PFIZER go up and down completely randomly.

Pair Corralation between Viemed Healthcare and PFIZER

Considering the 90-day investment horizon Viemed Healthcare is expected to under-perform the PFIZER. In addition to that, Viemed Healthcare is 2.81 times more volatile than PFIZER INC 43. It trades about -0.12 of its total potential returns per unit of risk. PFIZER INC 43 is currently generating about -0.14 per unit of volatility. If you would invest  8,796  in PFIZER INC 43 on September 27, 2024 and sell it today you would lose (163.00) from holding PFIZER INC 43 or give up 1.85% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	81.82%
Values	Daily Returns

Viemed Healthcare  vs.  PFIZER INC 43

Viemed Healthcare

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Viemed Healthcare are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent primary indicators, Viemed Healthcare may actually be approaching a critical reversion point that can send shares even higher in January 2025.

PFIZER INC 43

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PFIZER INC 43 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for PFIZER INC 43 investors.

Pair Trading with Viemed Healthcare and PFIZER

The main advantage of trading using opposite Viemed Healthcare and PFIZER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Viemed Healthcare 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 Viemed Healthcare and PFIZER INC 43 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 Transaction History module to view history of all your transactions and understand their impact on performance.