Correlation Between Pfizer and Marker Therapeutics

Can any of the company-specific risk be diversified away by investing in both Pfizer and Marker Therapeutics 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 Marker Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Pfizer Inc and Marker Therapeutics, you can compare the effects of market volatilities on Pfizer and Marker Therapeutics 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 Marker Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and Marker Therapeutics.

Diversification Opportunities for Pfizer and Marker Therapeutics

0.23

Correlation Coefficient

Pfizer  Marker Therapeutics

Modest diversification

The 3 months correlation between Pfizer and Marker is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and Marker Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marker Therapeutics 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 Marker Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marker Therapeutics has no effect on the direction of Pfizer i.e., Pfizer and Marker Therapeutics go up and down completely randomly.

Pair Corralation between Pfizer and Marker Therapeutics

Considering the 90-day investment horizon Pfizer Inc is expected to generate 0.17 times more return on investment than Marker Therapeutics. However, Pfizer Inc is 5.91 times less risky than Marker Therapeutics. It trades about -0.11 of its potential returns per unit of risk. Marker Therapeutics is currently generating about -0.4 per unit of risk. If you would invest  2,671  in Pfizer Inc on October 22, 2024 and sell it today you would lose (41.00) from holding Pfizer Inc or give up 1.54% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Pfizer Inc  vs.  Marker Therapeutics

Pfizer Inc

Risk-Adjusted Performance

0 of 100

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 latest weak performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Marker Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Marker Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unfluctuating performance in the last few months, the Stock's forward-looking signals remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Pfizer and Marker Therapeutics

The main advantage of trading using opposite Pfizer and Marker Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, Marker Therapeutics 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 Marker Therapeutics will offset losses from the drop in Marker Therapeutics' long position.

The idea behind Pfizer Inc and Marker Therapeutics 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.