Correlation Between Pfizer and FundX Aggressive

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

Diversification Opportunities for Pfizer and FundX Aggressive

-0.65
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Pfizer and FundX is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and FundX Aggressive ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FundX Aggressive 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 FundX Aggressive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FundX Aggressive ETF has no effect on the direction of Pfizer i.e., Pfizer and FundX Aggressive go up and down completely randomly.

Pair Corralation between Pfizer and FundX Aggressive

Considering the 90-day investment horizon Pfizer Inc is expected to under-perform the FundX Aggressive. In addition to that, Pfizer is 1.36 times more volatile than FundX Aggressive ETF. It trades about -0.08 of its total potential returns per unit of risk. FundX Aggressive ETF is currently generating about 0.08 per unit of volatility. If you would invest  5,019  in FundX Aggressive ETF on September 3, 2024 and sell it today you would earn a total of  2,260  from holding FundX Aggressive ETF or generate 45.03% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Pfizer Inc  vs.  FundX Aggressive ETF

 Performance 
       Timeline  
Pfizer Inc 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Pfizer Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Pfizer is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.
FundX Aggressive ETF 

Risk-Adjusted Performance

14 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in FundX Aggressive ETF are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, FundX Aggressive may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pfizer and FundX Aggressive Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Pfizer and FundX Aggressive

The main advantage of trading using opposite Pfizer and FundX Aggressive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, FundX Aggressive 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 FundX Aggressive will offset losses from the drop in FundX Aggressive's long position.
The idea behind Pfizer Inc and FundX Aggressive ETF 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.

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