Correlation Between Pfizer and First Trust
Can any of the company-specific risk be diversified away by investing in both Pfizer and First Trust 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 First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pfizer Inc and First Trust Exchange Traded, you can compare the effects of market volatilities on Pfizer and First Trust 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 First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and First Trust.
Diversification Opportunities for Pfizer and First Trust
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Pfizer and First is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and First Trust Exchange Traded in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Exchange 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 First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Exchange has no effect on the direction of Pfizer i.e., Pfizer and First Trust go up and down completely randomly.
Pair Corralation between Pfizer and First Trust
Considering the 90-day investment horizon Pfizer Inc is expected to under-perform the First Trust. In addition to that, Pfizer is 1.23 times more volatile than First Trust Exchange Traded. It trades about -0.23 of its total potential returns per unit of risk. First Trust Exchange Traded is currently generating about 0.15 per unit of volatility. If you would invest 2,514 in First Trust Exchange Traded on August 28, 2024 and sell it today you would earn a total of 102.00 from holding First Trust Exchange Traded or generate 4.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pfizer Inc vs. First Trust Exchange Traded
Performance |
| Timeline |
| Pfizer Inc |
| First Trust Exchange |
Pfizer and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pfizer and First Trust
The main advantage of trading using opposite Pfizer and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, First Trust 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 First Trust will offset losses from the drop in First Trust's long position.| Pfizer vs. Capricor Therapeutics | Pfizer vs. Soleno Therapeutics | Pfizer vs. Bio Path Holdings | Pfizer vs. Moleculin Biotech |
| First Trust vs. Invesco Dynamic Large | First Trust vs. Perella Weinberg Partners | First Trust vs. HUMANA INC | First Trust vs. Aquagold International |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |