Correlation Between Pfizer and STF Tactical

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

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

Diversification Opportunities for Pfizer and STF Tactical

-0.83

Correlation Coefficient

Pfizer  STF Tactical

Pay attention - limited upside

The 3 months correlation between Pfizer and STF is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and STF Tactical Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STF Tactical Growth 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 STF Tactical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STF Tactical Growth has no effect on the direction of Pfizer i.e., Pfizer and STF Tactical go up and down completely randomly.

Pair Corralation between Pfizer and STF Tactical

Considering the 90-day investment horizon Pfizer Inc is expected to under-perform the STF Tactical. In addition to that, Pfizer is 1.68 times more volatile than STF Tactical Growth. It trades about -0.02 of its total potential returns per unit of risk. STF Tactical Growth is currently generating about 0.11 per unit of volatility. If you would invest  1,944  in STF Tactical Growth on September 14, 2024 and sell it today you would earn a total of  554.00  from holding STF Tactical Growth or generate 28.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	99.63%
Values	Daily Returns

Pfizer Inc  vs.  STF Tactical Growth

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 abnormal performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

STF Tactical Growth

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in STF Tactical Growth are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent technical and fundamental indicators, STF Tactical displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pfizer and STF Tactical

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

The idea behind Pfizer Inc and STF Tactical Growth 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.