Correlation Between Pfizer and DBX ETF

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

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

Diversification Opportunities for Pfizer and DBX ETF

0.72

Correlation Coefficient

Pfizer  DBX ETF

Poor diversification

The 3 months correlation between Pfizer and DBX is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and DBX ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DBX ETF Trust 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 DBX ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DBX ETF Trust has no effect on the direction of Pfizer i.e., Pfizer and DBX ETF go up and down completely randomly.

Pair Corralation between Pfizer and DBX ETF

Considering the 90-day investment horizon Pfizer Inc is expected to under-perform the DBX ETF. But the stock apears to be less risky and, when comparing its historical volatility, Pfizer Inc is 1.19 times less risky than DBX ETF. The stock trades about -0.16 of its potential returns per unit of risk. The DBX ETF Trust is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest  3,244  in DBX ETF Trust on January 20, 2025 and sell it today you would lose (439.00) from holding DBX ETF Trust or give up 13.53% of portfolio value over 90 days.

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

Pfizer Inc  vs.  DBX ETF Trust

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 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 May 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

DBX ETF Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days DBX ETF Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Etf's basic indicators remain rather sound which may send shares a bit higher in May 2025. The latest tumult may also be a sign of longer-term up-swing for the fund shareholders.

Pair Trading with Pfizer and DBX ETF

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

The idea behind Pfizer Inc and DBX ETF Trust 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.