Correlation Between Pfizer and ProShares

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

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

Diversification Opportunities for Pfizer and ProShares

-0.27

Correlation Coefficient

Pfizer  ProShares

Very good diversification

The 3 months correlation between Pfizer and ProShares is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and ProShares DJ Brookfield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares DJ Brookfield 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 ProShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares DJ Brookfield has no effect on the direction of Pfizer i.e., Pfizer and ProShares go up and down completely randomly.

Pair Corralation between Pfizer and ProShares

Considering the 90-day investment horizon Pfizer Inc is expected to under-perform the ProShares. In addition to that, Pfizer is 1.51 times more volatile than ProShares DJ Brookfield. It trades about -0.04 of its total potential returns per unit of risk. ProShares DJ Brookfield is currently generating about 0.15 per unit of volatility. If you would invest  4,896  in ProShares DJ Brookfield on December 29, 2024 and sell it today you would earn a total of  356.00  from holding ProShares DJ Brookfield or generate 7.27% return on investment over 90 days.

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

Pfizer Inc  vs.  ProShares DJ Brookfield

Pfizer Inc

Risk-Adjusted Performance

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 newest stock price tumult, may contribute to shorter-term losses for the shareholders.

ProShares DJ Brookfield

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ProShares DJ Brookfield are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak essential indicators, ProShares may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Pfizer and ProShares

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

The idea behind Pfizer Inc and ProShares DJ Brookfield 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.