Correlation Between Hexcel and Pfizer

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

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

Diversification Opportunities for Hexcel and Pfizer

0.72

Correlation Coefficient

Hexcel  Pfizer

Poor diversification

The 3 months correlation between Hexcel and Pfizer is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Hexcel and Pfizer Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pfizer Inc and Hexcel 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 Hexcel 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 Hexcel i.e., Hexcel and Pfizer go up and down completely randomly.

Pair Corralation between Hexcel and Pfizer

Considering the 90-day investment horizon Hexcel is expected to generate 1.09 times more return on investment than Pfizer. However, Hexcel is 1.09 times more volatile than Pfizer Inc. It trades about 0.14 of its potential returns per unit of risk. Pfizer Inc is currently generating about 0.12 per unit of risk. If you would invest  5,417  in Hexcel on May 18, 2025 and sell it today you would earn a total of  756.00  from holding Hexcel or generate 13.96% return on investment over 90 days.

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

Hexcel  vs.  Pfizer Inc

Hexcel

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hexcel are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite abnormal basic indicators, Hexcel disclosed 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 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating 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 Hexcel and Pfizer

The main advantage of trading using opposite Hexcel and Pfizer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hexcel 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 Hexcel 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.