Correlation Between Pfizer and Fundamental Income

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

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

Diversification Opportunities for Pfizer and Fundamental Income

0.8

Correlation Coefficient

Pfizer  Fundamental Income

Very poor diversification

The 3 months correlation between Pfizer and Fundamental is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and Fundamental Income Net in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fundamental Income Net 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 Fundamental Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fundamental Income Net has no effect on the direction of Pfizer i.e., Pfizer and Fundamental Income go up and down completely randomly.

Pair Corralation between Pfizer and Fundamental Income

Considering the 90-day investment horizon Pfizer Inc is expected to generate 1.96 times more return on investment than Fundamental Income. However, Pfizer is 1.96 times more volatile than Fundamental Income Net. It trades about 0.12 of its potential returns per unit of risk. Fundamental Income Net is currently generating about 0.06 per unit of risk. If you would invest  2,223  in Pfizer Inc on April 28, 2025 and sell it today you would earn a total of  256.00  from holding Pfizer Inc or generate 11.52% return on investment over 90 days.

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

Pfizer Inc  vs.  Fundamental Income Net

Pfizer Inc

Risk-Adjusted Performance

OK

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 weak technical and fundamental indicators, Pfizer may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Fundamental Income Net

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Fundamental Income Net are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Fundamental Income is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Pfizer and Fundamental Income

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

The idea behind Pfizer Inc and Fundamental Income Net 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.