Correlation Between Pfizer and Amarc Resources

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

By analyzing existing cross correlation between Pfizer Inc and Amarc Resources, you can compare the effects of market volatilities on Pfizer and Amarc Resources 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 Amarc Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and Amarc Resources.

Diversification Opportunities for Pfizer and Amarc Resources

0.77

Correlation Coefficient

Pfizer  Amarc Resources

Poor diversification

The 3 months correlation between Pfizer and Amarc is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and Amarc Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amarc Resources 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 Amarc Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amarc Resources has no effect on the direction of Pfizer i.e., Pfizer and Amarc Resources go up and down completely randomly.

Pair Corralation between Pfizer and Amarc Resources

Considering the 90-day investment horizon Pfizer is expected to generate 3.39 times less return on investment than Amarc Resources. But when comparing it to its historical volatility, Pfizer Inc is 2.49 times less risky than Amarc Resources. It trades about 0.12 of its potential returns per unit of risk. Amarc Resources is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  36.00  in Amarc Resources on April 28, 2025 and sell it today you would earn a total of  15.00  from holding Amarc Resources or generate 41.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Pfizer Inc  vs.  Amarc Resources

Pfizer Inc

Risk-Adjusted Performance

OK

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 weak technical and fundamental indicators, Pfizer may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Amarc Resources

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Amarc Resources are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Amarc Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pfizer and Amarc Resources

The main advantage of trading using opposite Pfizer and Amarc Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, Amarc Resources 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 Amarc Resources will offset losses from the drop in Amarc Resources' long position.

The idea behind Pfizer Inc and Amarc Resources 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.