Correlation Between FactSet Research and Pfizer
Can any of the company-specific risk be diversified away by investing in both FactSet Research 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 FactSet Research and Pfizer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FactSet Research Systems and Pfizer Inc, you can compare the effects of market volatilities on FactSet Research 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 FactSet Research with a short position of Pfizer. Check out your portfolio center. Please also check ongoing floating volatility patterns of FactSet Research and Pfizer.
Diversification Opportunities for FactSet Research and Pfizer
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FactSet and Pfizer is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding FactSet Research Systems and Pfizer Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pfizer Inc and FactSet Research 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 FactSet Research Systems 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 FactSet Research i.e., FactSet Research and Pfizer go up and down completely randomly.
Pair Corralation between FactSet Research and Pfizer
Considering the 90-day investment horizon FactSet Research Systems is expected to generate 1.02 times more return on investment than Pfizer. However, FactSet Research is 1.02 times more volatile than Pfizer Inc. It trades about -0.26 of its potential returns per unit of risk. Pfizer Inc is currently generating about -0.53 per unit of risk. If you would invest 44,291 in FactSet Research Systems on January 9, 2025 and sell it today you would lose (4,431) from holding FactSet Research Systems or give up 10.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
FactSet Research Systems vs. Pfizer Inc
Performance |
| Timeline |
| FactSet Research Systems |
| Pfizer Inc |
FactSet Research and Pfizer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FactSet Research and Pfizer
The main advantage of trading using opposite FactSet Research and Pfizer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FactSet Research 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.| FactSet Research vs. Dun Bradstreet Holdings | FactSet Research vs. Moodys | FactSet Research vs. MSCI Inc | FactSet Research vs. Intercontinental Exchange |
| Pfizer vs. AbbVie Inc | Pfizer vs. Merck Company | Pfizer vs. Eli Lilly and | Pfizer vs. Bristol Myers Squibb |
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 the Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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