Correlation Between Pfizer and DATATRAK International

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

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

Diversification Opportunities for Pfizer and DATATRAK International

0.08

Correlation Coefficient

Pfizer  DATATRAK International

Significant diversification

The 3 months correlation between Pfizer and DATATRAK is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and DATATRAK International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DATATRAK International 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 DATATRAK International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DATATRAK International has no effect on the direction of Pfizer i.e., Pfizer and DATATRAK International go up and down completely randomly.

Pair Corralation between Pfizer and DATATRAK International

Considering the 90-day investment horizon Pfizer is expected to generate 17.14 times less return on investment than DATATRAK International. But when comparing it to its historical volatility, Pfizer Inc is 5.24 times less risky than DATATRAK International. It trades about 0.05 of its potential returns per unit of risk. DATATRAK International is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  38.00  in DATATRAK International on July 8, 2025 and sell it today you would earn a total of  42.00  from holding DATATRAK International or generate 110.53% return on investment over 90 days.

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

Pfizer Inc  vs.  DATATRAK International

Pfizer Inc

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Pfizer Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Pfizer is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

DATATRAK International

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in DATATRAK International are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady basic indicators, DATATRAK International disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pfizer and DATATRAK International

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

The idea behind Pfizer Inc and DATATRAK International 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.