Correlation Between Pfizer and Direxion Daily

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

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

Diversification Opportunities for Pfizer and Direxion Daily

-0.79

Correlation Coefficient

Pfizer  Direxion Daily

Pay attention - limited upside

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

Pair Corralation between Pfizer and Direxion Daily

Considering the 90-day investment horizon Pfizer Inc is expected to generate 0.45 times more return on investment than Direxion Daily. However, Pfizer Inc is 2.22 times less risky than Direxion Daily. It trades about 0.03 of its potential returns per unit of risk. Direxion Daily Small is currently generating about -0.1 per unit of risk. If you would invest  2,303  in Pfizer Inc on May 4, 2025 and sell it today you would earn a total of  46.00  from holding Pfizer Inc or generate 2.0% return on investment over 90 days.

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

Pfizer Inc  vs.  Direxion Daily Small

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.

Direxion Daily Small

Risk-Adjusted Performance

Very Weak

Over the last 90 days Direxion Daily Small has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Etf's basic indicators remain somewhat strong which may send shares a bit higher in September 2025. The current disturbance may also be a sign of long term up-swing for the ETF investors.

Pair Trading with Pfizer and Direxion Daily

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

The idea behind Pfizer Inc and Direxion Daily Small 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.