Correlation Between Pfizer and The Arbitrage
Can any of the company-specific risk be diversified away by investing in both Pfizer and The Arbitrage 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 The Arbitrage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pfizer Inc and The Arbitrage Credit, you can compare the effects of market volatilities on Pfizer and The Arbitrage 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 The Arbitrage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and The Arbitrage.
Diversification Opportunities for Pfizer and The Arbitrage
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pfizer and The is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and The Arbitrage Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arbitrage Credit 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 The Arbitrage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arbitrage Credit has no effect on the direction of Pfizer i.e., Pfizer and The Arbitrage go up and down completely randomly.
Pair Corralation between Pfizer and The Arbitrage
Considering the 90-day investment horizon Pfizer Inc is expected to under-perform the The Arbitrage. In addition to that, Pfizer is 17.64 times more volatile than The Arbitrage Credit. It trades about -0.01 of its total potential returns per unit of risk. The Arbitrage Credit is currently generating about 0.12 per unit of volatility. If you would invest 980.00 in The Arbitrage Credit on March 30, 2025 and sell it today you would earn a total of 8.00 from holding The Arbitrage Credit or generate 0.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pfizer Inc vs. The Arbitrage Credit
Performance |
| Timeline |
| Pfizer Inc |
| Arbitrage Credit |
Pfizer and The Arbitrage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pfizer and The Arbitrage
The main advantage of trading using opposite Pfizer and The Arbitrage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, The Arbitrage 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 The Arbitrage will offset losses from the drop in The Arbitrage's long position.| Pfizer vs. First Watch Restaurant | Pfizer vs. Fresh Del Monte | Pfizer vs. Aegean Airlines SA | Pfizer vs. Marathon Digital Holdings |
| The Arbitrage vs. The Arbitrage Fund | The Arbitrage vs. The Arbitrage Event Driven | The Arbitrage vs. The Arbitrage Fund | The Arbitrage vs. The Arbitrage Event Driven |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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