Correlation Between FIRST REP and Pfizer

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

By analyzing existing cross correlation between FIRST REP BK and Pfizer Inc, you can compare the effects of market volatilities on FIRST REP and Pfizer 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 FIRST REP with a short position of Pfizer. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIRST REP and Pfizer.

Diversification Opportunities for FIRST REP and Pfizer

0.27

Correlation Coefficient

FIRST REP  Pfizer

Modest diversification

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

Pair Corralation between FIRST REP and Pfizer

If you would invest  33.00  in FIRST REP BK on January 29, 2024 and sell it today you would earn a total of  0.00  from holding FIRST REP BK or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	2.33%
Values	Daily Returns

FIRST REP BK  vs.  Pfizer Inc

FIRST REP BK

Risk-Adjusted Performance

0 of 100

Very Weak

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

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.

Pair Trading with FIRST REP and Pfizer

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

The idea behind FIRST REP BK and Pfizer Inc 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.