Correlation Between Pfizer and MacroGenics

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

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

Diversification Opportunities for Pfizer and MacroGenics

0.79

Correlation Coefficient

Pfizer  MacroGenics

Poor diversification

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

Pair Corralation between Pfizer and MacroGenics

Considering the 90-day investment horizon Pfizer Inc is expected to generate 0.29 times more return on investment than MacroGenics. However, Pfizer Inc is 3.49 times less risky than MacroGenics. It trades about -0.11 of its potential returns per unit of risk. MacroGenics is currently generating about -0.12 per unit of risk. If you would invest  2,539  in Pfizer Inc on February 10, 2025 and sell it today you would lose (311.00) from holding Pfizer Inc or give up 12.25% of portfolio value over 90 days.

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

Pfizer Inc  vs.  MacroGenics

Pfizer Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pfizer Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

MacroGenics

Risk-Adjusted Performance

Very Weak

Over the last 90 days MacroGenics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in June 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Pfizer and MacroGenics

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

The idea behind Pfizer Inc and MacroGenics 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.