Correlation Between Pfizer and Principal Value

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

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

Diversification Opportunities for Pfizer and Principal Value

0.82

Correlation Coefficient

Pfizer  Principal Value

Very poor diversification

The 3 months correlation between Pfizer and Principal is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and Principal Value ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Principal Value ETF 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 Principal Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Principal Value ETF has no effect on the direction of Pfizer i.e., Pfizer and Principal Value go up and down completely randomly.

Pair Corralation between Pfizer and Principal Value

Considering the 90-day investment horizon Pfizer Inc is expected to generate 2.02 times more return on investment than Principal Value. However, Pfizer is 2.02 times more volatile than Principal Value ETF. It trades about 0.12 of its potential returns per unit of risk. Principal Value ETF is currently generating about 0.23 per unit of risk. If you would invest  2,249  in Pfizer Inc on April 25, 2025 and sell it today you would earn a total of  265.00  from holding Pfizer Inc or generate 11.78% 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.  Principal Value ETF

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

Principal Value ETF

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Principal Value ETF are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Principal Value may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Pfizer and Principal Value

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

The idea behind Pfizer Inc and Principal Value ETF 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.