Correlation Between Moderna and Pfizer

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

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

Diversification Opportunities for Moderna and Pfizer

0.54

Correlation Coefficient

Moderna  Pfizer

Very weak diversification

The 3 months correlation between Moderna and Pfizer is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Moderna and Pfizer Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pfizer Inc and Moderna 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 Moderna 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 Moderna i.e., Moderna and Pfizer go up and down completely randomly.

Pair Corralation between Moderna and Pfizer

Assuming the 90 days horizon Moderna is expected to under-perform the Pfizer. In addition to that, Moderna is 4.35 times more volatile than Pfizer Inc. It trades about -0.06 of its total potential returns per unit of risk. Pfizer Inc is currently generating about -0.1 per unit of volatility. If you would invest  2,506  in Pfizer Inc on December 30, 2024 and sell it today you would lose (207.00) from holding Pfizer Inc or give up 8.26% of portfolio value over 90 days.

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

Moderna  vs.  Pfizer Inc

Moderna

Risk-Adjusted Performance

Very Weak

Over the last 90 days Moderna has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

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. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Moderna and Pfizer

The main advantage of trading using opposite Moderna and Pfizer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moderna 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.

The idea behind Moderna 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.

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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.