Correlation Between Walmart and Pfizer
Can any of the company-specific risk be diversified away by investing in both Walmart and Pfizer 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 Walmart and Pfizer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Pfizer Inc, you can compare the effects of market volatilities on Walmart and Pfizer 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 Walmart with a short position of Pfizer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Pfizer.
Diversification Opportunities for Walmart and Pfizer
Pay attention - limited upside
The 3 months correlation between Walmart and Pfizer is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Pfizer Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pfizer Inc and Walmart 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 Walmart are associated (or correlated) with Pfizer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pfizer Inc has no effect on the direction of Walmart i.e., Walmart and Pfizer go up and down completely randomly.
Pair Corralation between Walmart and Pfizer
Considering the 90-day investment horizon Walmart is expected to generate 0.75 times more return on investment than Pfizer. However, Walmart is 1.33 times less risky than Pfizer. It trades about 0.27 of its potential returns per unit of risk. Pfizer Inc is currently generating about -0.06 per unit of risk. If you would invest 7,717 in Walmart on September 3, 2024 and sell it today you would earn a total of 1,533 from holding Walmart or generate 19.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walmart vs. Pfizer Inc
Performance |
| Timeline |
| Walmart |
| Pfizer Inc |
Walmart and Pfizer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Pfizer
The main advantage of trading using opposite Walmart and Pfizer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Pfizer 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 Pfizer will offset losses from the drop in Pfizer's long position.| Walmart vs. Partner Communications | Walmart vs. Merck Company | Walmart vs. Western Midstream Partners | Walmart vs. Edgewise Therapeutics |
| Pfizer vs. Merck Company | Pfizer vs. Johnson Johnson | Pfizer vs. Highway Holdings Limited | Pfizer vs. QCR Holdings |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |