Correlation Between ALPHACENTRIC HEDGED and Pfizer

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

Diversification Opportunities for ALPHACENTRIC HEDGED and Pfizer

0.82
  Correlation Coefficient

Very poor diversification

The 3 months correlation between ALPHACENTRIC and Pfizer is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding ALPHACENTRIC HEDGED MARKET and Pfizer Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pfizer Inc and ALPHACENTRIC HEDGED 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 ALPHACENTRIC HEDGED MARKET 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 ALPHACENTRIC HEDGED i.e., ALPHACENTRIC HEDGED and Pfizer go up and down completely randomly.

Pair Corralation between ALPHACENTRIC HEDGED and Pfizer

Assuming the 90 days horizon ALPHACENTRIC HEDGED MARKET is expected to under-perform the Pfizer. But the mutual fund apears to be less risky and, when comparing its historical volatility, ALPHACENTRIC HEDGED MARKET is 2.73 times less risky than Pfizer. The mutual fund trades about 0.0 of its potential returns per unit of risk. The Pfizer Inc is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  3,484  in Pfizer Inc on September 10, 2022 and sell it today you would earn a total of  1,688  from holding Pfizer Inc or generate 48.45% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy99.8%
ValuesDaily Returns

ALPHACENTRIC HEDGED MARKET  vs.  Pfizer Inc

 Performance (%) 
       Timeline  
ALPHACENTRIC HEDGED 
ALPHACENTRIC Performance
0 of 100
Over the last 90 days ALPHACENTRIC HEDGED MARKET has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, ALPHACENTRIC HEDGED is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

ALPHACENTRIC Price Channel

Pfizer Inc 
Pfizer Performance
7 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Pfizer Inc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Pfizer may actually be approaching a critical reversion point that can send shares even higher in January 2023.

Pfizer Price Channel

ALPHACENTRIC HEDGED and Pfizer Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with ALPHACENTRIC HEDGED and Pfizer

The main advantage of trading using opposite ALPHACENTRIC HEDGED and Pfizer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALPHACENTRIC HEDGED 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.
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The idea behind ALPHACENTRIC HEDGED MARKET 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.
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.

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