Correlation Between Pfizer and Nuveen ESG

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

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

Diversification Opportunities for Pfizer and Nuveen ESG

-0.38

Correlation Coefficient

Pfizer  Nuveen ESG

Very good diversification

The 3 months correlation between Pfizer and Nuveen is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and Nuveen ESG Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen ESG Large 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 Nuveen ESG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen ESG Large has no effect on the direction of Pfizer i.e., Pfizer and Nuveen ESG go up and down completely randomly.

Pair Corralation between Pfizer and Nuveen ESG

Considering the 90-day investment horizon Pfizer Inc is expected to generate 1.21 times more return on investment than Nuveen ESG. However, Pfizer is 1.21 times more volatile than Nuveen ESG Large Cap. It trades about -0.04 of its potential returns per unit of risk. Nuveen ESG Large Cap is currently generating about -0.19 per unit of risk. If you would invest  2,620  in Pfizer Inc on December 4, 2024 and sell it today you would lose (28.00) from holding Pfizer Inc or give up 1.07% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Pfizer Inc  vs.  Nuveen ESG Large Cap

Pfizer Inc

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Pfizer Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Pfizer may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Nuveen ESG Large

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nuveen ESG Large Cap has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound essential indicators, Nuveen ESG is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Pfizer and Nuveen ESG

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

The idea behind Pfizer Inc and Nuveen ESG Large Cap 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.