Correlation Between Astronics and Pfizer

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

Diversification Opportunities for Astronics and Pfizer

-0.41
  Correlation Coefficient

Very good diversification

The 3 months correlation between Astronics and Pfizer is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Astronics Cp and Pfizer Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pfizer Inc and Astronics 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 Astronics Cp 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 Astronics i.e., Astronics and Pfizer go up and down completely randomly.

Pair Corralation between Astronics and Pfizer

Given the investment horizon of 90 days Astronics Cp is expected to generate 2.17 times more return on investment than Pfizer. However, Astronics is 2.17 times more volatile than Pfizer Inc. It trades about 0.3 of its potential returns per unit of risk. Pfizer Inc is currently generating about -0.16 per unit of risk. If you would invest  1,002  in Astronics Cp on May 13, 2022 and sell it today you would earn a total of  148.00  from holding Astronics Cp or generate 14.77% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy95.65%
ValuesDaily Returns

Astronics Cp  vs.  Pfizer Inc

 Performance (%) 
       Timeline  
Astronics Cp 
Astronics Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Astronics Cp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Astronics may actually be approaching a critical reversion point that can send shares even higher in September 2022.

Astronics Price Channel

Pfizer Inc 
Pfizer Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Pfizer Inc are ranked lower than 1 (%) 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

Astronics and Pfizer Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Astronics and Pfizer

The main advantage of trading using opposite Astronics and Pfizer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astronics 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 Astronics Cp 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.

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