Correlation Between Biofrontera and Pfizer

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

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

Diversification Opportunities for Biofrontera and Pfizer

0.55

Correlation Coefficient

Biofrontera  Pfizer

Very weak diversification

The 3 months correlation between Biofrontera and Pfizer is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Biofrontera and Pfizer Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pfizer Inc and Biofrontera 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 Biofrontera 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 Biofrontera i.e., Biofrontera and Pfizer go up and down completely randomly.

Pair Corralation between Biofrontera and Pfizer

Given the investment horizon of 90 days Biofrontera is expected to generate 3.8 times more return on investment than Pfizer. However, Biofrontera is 3.8 times more volatile than Pfizer Inc. It trades about 0.15 of its potential returns per unit of risk. Pfizer Inc is currently generating about 0.13 per unit of risk. If you would invest  64.00  in Biofrontera on May 25, 2025 and sell it today you would earn a total of  32.00  from holding Biofrontera or generate 50.0% return on investment over 90 days.

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

Biofrontera  vs.  Pfizer Inc

Biofrontera

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Biofrontera are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, Biofrontera demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pfizer Inc

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Pfizer Inc are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Pfizer may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Biofrontera and Pfizer

The main advantage of trading using opposite Biofrontera and Pfizer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biofrontera 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 Biofrontera 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.

Check out your portfolio center.

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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.