Correlation Between Pfizer and 345397XU2

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Can any of the company-specific risk be diversified away by investing in both Pfizer and 345397XU2 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 345397XU2 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pfizer Inc and FORD MTR CR, you can compare the effects of market volatilities on Pfizer and 345397XU2 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 345397XU2. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and 345397XU2.

Diversification Opportunities for Pfizer and 345397XU2

Pfizer345397XU2Diversified AwayPfizer345397XU2Diversified Away100%
0.01
  Correlation Coefficient

Significant diversification

The 3 months correlation between Pfizer and 345397XU2 is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and FORD MTR CR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FORD MTR CR 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 345397XU2. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FORD MTR CR has no effect on the direction of Pfizer i.e., Pfizer and 345397XU2 go up and down completely randomly.

Pair Corralation between Pfizer and 345397XU2

Considering the 90-day investment horizon Pfizer Inc is expected to under-perform the 345397XU2. But the stock apears to be less risky and, when comparing its historical volatility, Pfizer Inc is 32.08 times less risky than 345397XU2. The stock trades about -0.04 of its potential returns per unit of risk. The FORD MTR CR is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  9,410  in FORD MTR CR on November 26, 2024 and sell it today you would earn a total of  578.00  from holding FORD MTR CR or generate 6.14% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy94.34%
ValuesDaily Returns

Pfizer Inc  vs.  FORD MTR CR

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -4-2024
JavaScript chart by amCharts 3.21.15PFE 345397XU2
       Timeline  
Pfizer Inc 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
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 recent stock price tumult, may contribute to shorter-term losses for the shareholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb2525.52626.527
FORD MTR CR 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in FORD MTR CR are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 345397XU2 is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.159596979899

Pfizer and 345397XU2 Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-4.64-3.48-2.31-1.15-0.01941.152.333.524.75.89 0.51.01.5
JavaScript chart by amCharts 3.21.15PFE 345397XU2
       Returns  

Pair Trading with Pfizer and 345397XU2

The main advantage of trading using opposite Pfizer and 345397XU2 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, 345397XU2 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 345397XU2 will offset losses from the drop in 345397XU2's long position.
The idea behind Pfizer Inc and FORD MTR CR 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.

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