Correlation Between Pfizer and Arbe Robotics

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

Diversification Opportunities for Pfizer and Arbe Robotics

-0.57
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Pfizer and Arbe Robotics is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and Arbe Robotics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arbe Robotics and Pfizer 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 Pfizer Inc are associated (or correlated) with Arbe Robotics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arbe Robotics has no effect on the direction of Pfizer i.e., Pfizer and Arbe Robotics go up and down completely randomly.

Pair Corralation between Pfizer and Arbe Robotics

Considering the 90-day investment horizon Pfizer Inc is expected to generate 0.32 times more return on investment than Arbe Robotics. However, Pfizer Inc is 3.17 times less risky than Arbe Robotics. It trades about 0.35 of its potential returns per unit of risk. Arbe Robotics is currently generating about -0.31 per unit of risk. If you would invest  4,667  in Pfizer Inc on September 3, 2022 and sell it today you would earn a total of  424.00  from holding Pfizer Inc or generate 9.09% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Pfizer Inc  vs.  Arbe Robotics

 Performance (%) 
       Timeline  
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 conflicting 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

Arbe Robotics 
Arbe Robotics Performance
0 of 100
Over the last 90 days Arbe Robotics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's fundamental drivers remain rather sound which may send shares a bit higher in January 2023. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Arbe Robotics Price Channel

Pfizer and Arbe Robotics Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Pfizer and Arbe Robotics

The main advantage of trading using opposite Pfizer and Arbe Robotics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, Arbe Robotics 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 Arbe Robotics will offset losses from the drop in Arbe Robotics' long position.
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The idea behind Pfizer Inc and Arbe Robotics 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.

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