Correlation Between Blue Apron and Pfizer

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Can any of the company-specific risk be diversified away by investing in both Blue Apron 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 Blue Apron and Pfizer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blue Apron Holdings and Pfizer Inc, you can compare the effects of market volatilities on Blue Apron 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 Blue Apron with a short position of Pfizer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blue Apron and Pfizer.

Diversification Opportunities for Blue Apron and Pfizer

-0.55
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Blue Apron and Pfizer is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Blue Apron Holdings and Pfizer Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pfizer Inc and Blue Apron 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 Blue Apron Holdings 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 Blue Apron i.e., Blue Apron and Pfizer go up and down completely randomly.

Pair Corralation between Blue Apron and Pfizer

Given the investment horizon of 90 days Blue Apron Holdings is expected to under-perform the Pfizer. In addition to that, Blue Apron is 11.09 times more volatile than Pfizer Inc. It trades about -0.12 of its total potential returns per unit of risk. Pfizer Inc is currently generating about -0.13 per unit of volatility. If you would invest  4,576  in Pfizer Inc on July 6, 2022 and sell it today you would lose (162.00)  from holding Pfizer Inc or give up 3.54% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Blue Apron Holdings  vs.  Pfizer Inc

 Performance (%) 
       Timeline  
Blue Apron Holdings 
Blue Apron Performance
0 of 100
Over the last 90 days Blue Apron Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Blue Apron is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Blue Apron Price Channel

Pfizer Inc 
Pfizer Performance
0 of 100
Over the last 90 days Pfizer Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in November 2022. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pfizer Price Channel

Blue Apron and Pfizer Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Blue Apron and Pfizer

The main advantage of trading using opposite Blue Apron and Pfizer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blue Apron 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.
Blue Apron vs. Amazon Inc
The idea behind Blue Apron Holdings and Pfizer Inc 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.
Pfizer vs. Amazon Inc
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.

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