Correlation Between Pfizer and High-yield Municipal
Can any of the company-specific risk be diversified away by investing in both Pfizer and High-yield Municipal 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 High-yield Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pfizer Inc and High Yield Municipal Fund, you can compare the effects of market volatilities on Pfizer and High-yield Municipal 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 High-yield Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and High-yield Municipal.
Diversification Opportunities for Pfizer and High-yield Municipal
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pfizer and High-yield is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and HIGH-YIELD MUNICIPAL FUND in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High-yield Municipal Fund 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 High-yield Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High-yield Municipal Fund has no effect on the direction of Pfizer i.e., Pfizer and High-yield Municipal go up and down completely randomly.
Pair Corralation between Pfizer and High-yield Municipal
Considering the 90-day investment horizon Pfizer Inc is expected to generate 10.94 times more return on investment than High-yield Municipal. However, Pfizer is 10.94 times more volatile than High Yield Municipal Fund. It trades about 0.1 of its potential returns per unit of risk. High Yield Municipal Fund is currently generating about 0.24 per unit of risk. If you would invest 2,689 in Pfizer Inc on December 29, 2023 and sell it today you would earn a total of 89.00 from holding Pfizer Inc or generate 3.31% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Pfizer Inc vs. HIGH-YIELD MUNICIPAL FUND
Performance |
Timeline |
Pfizer Inc |
High-yield Municipal Fund |
Pfizer and High-yield Municipal Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Pfizer and High-yield Municipal
The main advantage of trading using opposite Pfizer and High-yield Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, High-yield Municipal 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 High-yield Municipal will offset losses from the drop in High-yield Municipal's long position.Pfizer vs. Agilent Technologies | Pfizer vs. Mustang Bio | Pfizer vs. Moleculin Biotech | Pfizer vs. Clever Leaves Holdings |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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