Correlation Between OAKMARK INTERNATIONAL and Pfizer

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

Diversification Opportunities for OAKMARK INTERNATIONAL and Pfizer

0.93
  Correlation Coefficient

Almost no diversification

The 3 months correlation between OAKMARK and Pfizer is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding OAKMARK INTERNATIONAL SMALL and Pfizer Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pfizer Inc and OAKMARK INTERNATIONAL 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 OAKMARK INTERNATIONAL SMALL 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 OAKMARK INTERNATIONAL i.e., OAKMARK INTERNATIONAL and Pfizer go up and down completely randomly.

Pair Corralation between OAKMARK INTERNATIONAL and Pfizer

Assuming the 90 days horizon OAKMARK INTERNATIONAL SMALL is expected to generate 1.67 times more return on investment than Pfizer. However, OAKMARK INTERNATIONAL is 1.67 times more volatile than Pfizer Inc. It trades about 0.38 of its potential returns per unit of risk. Pfizer Inc is currently generating about 0.31 per unit of risk. If you would invest  1,480  in OAKMARK INTERNATIONAL SMALL on September 5, 2022 and sell it today you would earn a total of  236.00  from holding OAKMARK INTERNATIONAL SMALL or generate 15.95% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy95.45%
ValuesDaily Returns

OAKMARK INTERNATIONAL SMALL  vs.  Pfizer Inc

 Performance (%) 
       Timeline  
OAKMARK INTERNATIONAL 
OAKMARK Performance
10 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in OAKMARK INTERNATIONAL SMALL are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly inconsistent technical and fundamental indicators, OAKMARK INTERNATIONAL showed solid returns over the last few months and may actually be approaching a breakup point.

OAKMARK Price Channel

Pfizer Inc 
Pfizer Performance
9 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Pfizer Inc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal 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

OAKMARK INTERNATIONAL and Pfizer Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with OAKMARK INTERNATIONAL and Pfizer

The main advantage of trading using opposite OAKMARK INTERNATIONAL and Pfizer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OAKMARK INTERNATIONAL 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 OAKMARK INTERNATIONAL SMALL 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.

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