Correlation Between Pfizer and IShares Healthcare
Can any of the company-specific risk be diversified away by investing in both Pfizer and IShares Healthcare 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 IShares Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pfizer Inc and iShares Healthcare ETF, you can compare the effects of market volatilities on Pfizer and IShares Healthcare 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 IShares Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and IShares Healthcare.
Diversification Opportunities for Pfizer and IShares Healthcare
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pfizer and IShares is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and iShares Healthcare ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Healthcare ETF 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 IShares Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Healthcare ETF has no effect on the direction of Pfizer i.e., Pfizer and IShares Healthcare go up and down completely randomly.
Pair Corralation between Pfizer and IShares Healthcare
Considering the 90-day investment horizon Pfizer Inc is expected to under-perform the IShares Healthcare. In addition to that, Pfizer is 2.03 times more volatile than iShares Healthcare ETF. It trades about -0.07 of its total potential returns per unit of risk. iShares Healthcare ETF is currently generating about 0.03 per unit of volatility. If you would invest 5,578 in iShares Healthcare ETF on August 27, 2024 and sell it today you would earn a total of 496.00 from holding iShares Healthcare ETF or generate 8.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pfizer Inc vs. iShares Healthcare ETF
Performance |
| Timeline |
| Pfizer Inc |
| iShares Healthcare ETF |
Pfizer and IShares Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pfizer and IShares Healthcare
The main advantage of trading using opposite Pfizer and IShares Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, IShares Healthcare 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 IShares Healthcare will offset losses from the drop in IShares Healthcare's long position.| Pfizer vs. Capricor Therapeutics | Pfizer vs. Soleno Therapeutics | Pfizer vs. Bio Path Holdings | Pfizer vs. Moleculin Biotech |
| IShares Healthcare vs. Global X Clean | IShares Healthcare vs. Global X Renewable | IShares Healthcare vs. Global X Thematic | IShares Healthcare vs. Global X AgTech |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |