Correlation Between EVgo Equity and Pfizer

Can any of the company-specific risk be diversified away by investing in both EVgo Equity 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 EVgo Equity and Pfizer into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between EVgo Equity Warrants and Pfizer Inc, you can compare the effects of market volatilities on EVgo Equity 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 EVgo Equity with a short position of Pfizer. Check out your portfolio center. Please also check ongoing floating volatility patterns of EVgo Equity and Pfizer.

Diversification Opportunities for EVgo Equity and Pfizer

-0.63

Correlation Coefficient

EVgo Equity  Pfizer

Excellent diversification

The 3 months correlation between EVgo and Pfizer is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding EVgo Equity Warrants and Pfizer Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pfizer Inc and EVgo Equity 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 EVgo Equity Warrants 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 EVgo Equity i.e., EVgo Equity and Pfizer go up and down completely randomly.

Pair Corralation between EVgo Equity and Pfizer

Assuming the 90 days horizon EVgo Equity Warrants is expected to generate 5.9 times more return on investment than Pfizer. However, EVgo Equity is 5.9 times more volatile than Pfizer Inc. It trades about 0.05 of its potential returns per unit of risk. Pfizer Inc is currently generating about 0.06 per unit of risk. If you would invest  19.00  in EVgo Equity Warrants on May 1, 2025 and sell it today you would earn a total of  1.00  from holding EVgo Equity Warrants or generate 5.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

EVgo Equity Warrants  vs.  Pfizer Inc

EVgo Equity Warrants

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in EVgo Equity Warrants are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, EVgo Equity showed solid returns over the last few months and may actually be approaching a breakup point.

Pfizer Inc

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Pfizer Inc are ranked lower than 4 (%) 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.

Pair Trading with EVgo Equity and Pfizer

The main advantage of trading using opposite EVgo Equity and Pfizer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EVgo Equity 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 EVgo Equity Warrants 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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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 the Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.