Correlation Between Pfizer and Blue Apron

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

Diversification Opportunities for Pfizer and Blue Apron

-0.5
  Correlation Coefficient

Very good diversification

The 3 months correlation between Pfizer and Blue Apron is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and Blue Apron Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Apron Holdings 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 Blue Apron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Apron Holdings has no effect on the direction of Pfizer i.e., Pfizer and Blue Apron go up and down completely randomly.

Pair Corralation between Pfizer and Blue Apron

Considering the 90-day investment horizon Pfizer is expected to generate 1.46 times less return on investment than Blue Apron. But when comparing it to its historical volatility, Pfizer Inc is 4.33 times less risky than Blue Apron. It trades about 0.05 of its potential returns per unit of risk. Blue Apron Holdings is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  692.00  in Blue Apron Holdings on July 7, 2022 and sell it today you would lose (392.00)  from holding Blue Apron Holdings or give up 56.65% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Pfizer Inc  vs.  Blue Apron Holdings

 Performance (%) 
       Timeline  
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 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 and Blue Apron Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Pfizer and Blue Apron

The main advantage of trading using opposite Pfizer and Blue Apron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, Blue Apron 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 Blue Apron will offset losses from the drop in Blue Apron's long position.
Pfizer vs. Amazon Inc
The idea behind Pfizer Inc and Blue Apron Holdings 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.
Blue Apron 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 CEO Directory module to screen CEOs from public companies around the world.

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