Correlation Between Air Industries and Pfizer

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Can any of the company-specific risk be diversified away by investing in both Air Industries 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 Air Industries and Pfizer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Industries Group and Pfizer Inc, you can compare the effects of market volatilities on Air Industries 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 Air Industries with a short position of Pfizer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Industries and Pfizer.

Diversification Opportunities for Air Industries and Pfizer

0.07
  Correlation Coefficient

Significant diversification

The 3 months correlation between Air Industries and Pfizer is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Air Industries Group and Pfizer Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pfizer Inc and Air Industries 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 Air Industries Group 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 Air Industries i.e., Air Industries and Pfizer go up and down completely randomly.

Pair Corralation between Air Industries and Pfizer

Given the investment horizon of 90 days Air Industries Group is expected to under-perform the Pfizer. In addition to that, Air Industries is 1.55 times more volatile than Pfizer Inc. It trades about -0.06 of its total potential returns per unit of risk. Pfizer Inc is currently generating about 0.02 per unit of volatility. If you would invest  4,736  in Pfizer Inc on May 11, 2022 and sell it today you would earn a total of  221.00  from holding Pfizer Inc or generate 4.67% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Air Industries Group  vs.  Pfizer Inc

 Performance (%) 
       Timeline  
Air Industries Group 
Air Industries Performance
0 of 100
Over the last 90 days Air Industries Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Air Industries is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Air Industries Price Channel

Pfizer Inc 
Pfizer Performance
2 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Pfizer Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Pfizer is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pfizer Price Channel

Air Industries and Pfizer Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Air Industries and Pfizer

The main advantage of trading using opposite Air Industries and Pfizer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Industries 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 Air Industries Group 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..

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