Correlation Between Pfizer and IShares Tech

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

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

Diversification Opportunities for Pfizer and IShares Tech

0.79

Correlation Coefficient

Pfizer  IShares Tech

Poor diversification

The 3 months correlation between Pfizer and IShares is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and iShares Tech Breakthrough in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Tech Breakthrough 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 IShares Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Tech Breakthrough has no effect on the direction of Pfizer i.e., Pfizer and IShares Tech go up and down completely randomly.

Pair Corralation between Pfizer and IShares Tech

Considering the 90-day investment horizon Pfizer is expected to generate 3.77 times less return on investment than IShares Tech. In addition to that, Pfizer is 1.64 times more volatile than iShares Tech Breakthrough. It trades about 0.03 of its total potential returns per unit of risk. iShares Tech Breakthrough is currently generating about 0.17 per unit of volatility. If you would invest  5,133  in iShares Tech Breakthrough on May 4, 2025 and sell it today you would earn a total of  529.00  from holding iShares Tech Breakthrough or generate 10.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Pfizer Inc  vs.  iShares Tech Breakthrough

Pfizer Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Pfizer Inc are ranked lower than 2 (%) 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 current stock price tumult, may contribute to shorter-term losses for the shareholders.

iShares Tech Breakthrough

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Tech Breakthrough are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal fundamental indicators, IShares Tech may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Pfizer and IShares Tech

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

The idea behind Pfizer Inc and iShares Tech Breakthrough 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.