Correlation Between AKA Brands and Pfizer

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

Diversification Opportunities for AKA Brands and Pfizer

0.71
  Correlation Coefficient

Poor diversification

The 3 months correlation between AKA Brands and Pfizer is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding AKA Brands Holding and Pfizer Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pfizer Inc and AKA 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 AKA Brands Holding 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 AKA Brands i.e., AKA Brands and Pfizer go up and down completely randomly.

Pair Corralation between AKA Brands and Pfizer

Considering the 90-day investment horizon AKA Brands Holding is expected to under-perform the Pfizer. In addition to that, AKA Brands is 3.97 times more volatile than Pfizer Inc. It trades about -0.08 of its total potential returns per unit of risk. Pfizer Inc is currently generating about -0.05 per unit of volatility. If you would invest  4,948  in Pfizer Inc on July 9, 2022 and sell it today you would lose (639.00)  from holding Pfizer Inc or give up 12.91% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

AKA Brands Holding  vs.  Pfizer Inc

 Performance (%) 
       Timeline  
AKA Brands Holding 
AKA Brands Performance
0 of 100
Over the last 90 days AKA Brands Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain somewhat strong which may send shares a bit higher in November 2022. The current disturbance may also be a sign of long term up-swing for the company investors.

AKA Brands Price Channel

Pfizer Inc 
Pfizer Performance
0 of 100
Over the last 90 days Pfizer Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in November 2022. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pfizer Price Channel

AKA Brands and Pfizer Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with AKA Brands and Pfizer

The main advantage of trading using opposite AKA Brands and Pfizer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AKA 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.
AKA Brands vs. Amazon Inc
The idea behind AKA Brands Holding 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.
Pfizer vs. Amazon Inc
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.

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