Correlation Between Pfizer and Moderna
Can any of the company-specific risk be diversified away by investing in both Pfizer and Moderna 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 Moderna into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pfizer Inc and Moderna, you can compare the effects of market volatilities on Pfizer and Moderna 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 Moderna. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and Moderna.
Diversification Opportunities for Pfizer and Moderna
Poor diversification
The 3 months correlation between Pfizer and Moderna is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and Moderna in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moderna 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 Moderna. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moderna has no effect on the direction of Pfizer i.e., Pfizer and Moderna go up and down completely randomly.
Pair Corralation between Pfizer and Moderna
Considering the 90-day investment horizon Pfizer Inc is expected to generate 0.42 times more return on investment than Moderna. However, Pfizer Inc is 2.36 times less risky than Moderna. It trades about -0.06 of its potential returns per unit of risk. Moderna is currently generating about -0.07 per unit of risk. If you would invest 3,981 in Pfizer Inc on August 27, 2024 and sell it today you would lose (1,416) from holding Pfizer Inc or give up 35.57% 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. Moderna
Performance |
| Timeline |
| Pfizer Inc |
| Moderna |
Pfizer and Moderna Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pfizer and Moderna
The main advantage of trading using opposite Pfizer and Moderna positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, Moderna 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 Moderna will offset losses from the drop in Moderna's long position.| Pfizer vs. Capricor Therapeutics | Pfizer vs. Soleno Therapeutics | Pfizer vs. Bio Path Holdings | Pfizer vs. Moleculin Biotech |
| Moderna vs. CureVac NV | Moderna vs. Novavax | Moderna vs. Ocean Biomedical | Moderna vs. Enveric Biosciences |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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