Correlation Between Pfizer and First Tractor

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

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

Diversification Opportunities for Pfizer and First Tractor

-0.73

Correlation Coefficient

Pfizer  First Tractor

Pay attention - limited upside

The 3 months correlation between Pfizer and First is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and First Tractor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Tractor 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 First Tractor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Tractor has no effect on the direction of Pfizer i.e., Pfizer and First Tractor go up and down completely randomly.

Pair Corralation between Pfizer and First Tractor

If you would invest  2,295  in Pfizer Inc on April 29, 2025 and sell it today you would earn a total of  184.00  from holding Pfizer Inc or generate 8.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	50.0%
Values	Daily Returns

Pfizer Inc  vs.  First Tractor

Pfizer Inc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Pfizer Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Pfizer may actually be approaching a critical reversion point that can send shares even higher in August 2025.

First Tractor

Risk-Adjusted Performance

Very Weak

Over the last 90 days First Tractor has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, First Tractor is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Pfizer and First Tractor

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

The idea behind Pfizer Inc and First Tractor 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.