Correlation Between Designer Brands and Pfizer
Can any of the company-specific risk be diversified away by investing in both Designer Brands 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 Designer Brands and Pfizer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Designer Brands and Pfizer Inc, you can compare the effects of market volatilities on Designer Brands 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 Designer Brands with a short position of Pfizer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Designer Brands and Pfizer.
Diversification Opportunities for Designer Brands and Pfizer
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Designer and Pfizer is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Designer Brands and Pfizer Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pfizer Inc and Designer Brands 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 Designer Brands 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 Designer Brands i.e., Designer Brands and Pfizer go up and down completely randomly.
Pair Corralation between Designer Brands and Pfizer
Considering the 90-day investment horizon Designer Brands is expected to generate 2.9 times more return on investment than Pfizer. However, Designer Brands is 2.9 times more volatile than Pfizer Inc. It trades about -0.02 of its potential returns per unit of risk. Pfizer Inc is currently generating about -0.07 per unit of risk. If you would invest 1,108 in Designer Brands on January 18, 2024 and sell it today you would lose (241.00) from holding Designer Brands or give up 21.75% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Designer Brands vs. Pfizer Inc
Performance |
Timeline |
Designer Brands |
Pfizer Inc |
Designer Brands and Pfizer Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Designer Brands and Pfizer
The main advantage of trading using opposite Designer Brands and Pfizer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Designer Brands 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.Designer Brands vs. Wolverine World Wide | Designer Brands vs. Weyco Group | Designer Brands vs. Steven Madden | Designer Brands vs. Rocky Brands |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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