Correlation Between Sigma Lithium and Pfizer

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Sigma Lithium 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 Sigma Lithium and Pfizer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sigma Lithium Resources and Pfizer Inc, you can compare the effects of market volatilities on Sigma Lithium 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 Sigma Lithium with a short position of Pfizer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sigma Lithium and Pfizer.

Diversification Opportunities for Sigma Lithium and Pfizer

  Correlation Coefficient

Very weak diversification

The 3 months correlation between Sigma and Pfizer is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Sigma Lithium Resources and Pfizer Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pfizer Inc and Sigma Lithium 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 Sigma Lithium Resources 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 Sigma Lithium i.e., Sigma Lithium and Pfizer go up and down completely randomly.

Pair Corralation between Sigma Lithium and Pfizer

Given the investment horizon of 90 days Sigma Lithium is expected to generate 1.73 times less return on investment than Pfizer. In addition to that, Sigma Lithium is 2.89 times more volatile than Pfizer Inc. It trades about 0.07 of its total potential returns per unit of risk. Pfizer Inc is currently generating about 0.37 per unit of volatility. If you would invest  4,672  in Pfizer Inc on September 10, 2022 and sell it today you would earn a total of  506.00  from holding Pfizer Inc or generate 10.83% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
ValuesDaily Returns

Sigma Lithium Resources  vs.  Pfizer Inc

 Performance (%) 
Sigma Lithium Resources 
Sigma Performance
9 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Sigma Lithium Resources are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively sluggish primary indicators, Sigma Lithium revealed solid returns over the last few months and may actually be approaching a breakup point.

Sigma 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

Sigma Lithium and Pfizer Volatility Contrast

   Predicted Return Density   

Pair Trading with Sigma Lithium and Pfizer

The main advantage of trading using opposite Sigma Lithium and Pfizer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sigma Lithium 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.
Sigma Lithium vs. LL Flooring Holdings
Sigma Lithium vs. Fiskars Oyj Abp
Sigma Lithium vs. SSLJ
Sigma Lithium vs. Calloways Nursery
The idea behind Sigma Lithium Resources 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. Alcoa Corp
Pfizer vs. The Boeing
Pfizer vs. Exxon Mobil Corp
Pfizer vs. Walt Disney
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.

Other Complementary Tools

Equity Valuation
Check real value of public entities based on technical and fundamental data
Performance Analysis
Check effects of mean-variance optimization against your current asset allocation
Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Transaction History
View history of all your transactions and understand their impact on performance
Bond Analysis
Evaluate and analyze corporate bonds as a potential investment for your portfolios.