Correlation Between Pfizer and Delta Apparel

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

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

Diversification Opportunities for Pfizer and Delta Apparel

0.35

Correlation Coefficient

Pfizer  Delta Apparel

Weak diversification

The 3 months correlation between Pfizer and Delta is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and Delta Apparel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delta Apparel 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 Delta Apparel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delta Apparel has no effect on the direction of Pfizer i.e., Pfizer and Delta Apparel go up and down completely randomly.

Pair Corralation between Pfizer and Delta Apparel

If you would invest  5.10  in Delta Apparel on October 26, 2024 and sell it today you would earn a total of  0.00  from holding Delta Apparel or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	5.26%
Values	Daily Returns

Pfizer Inc  vs.  Delta Apparel

Pfizer Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pfizer Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Delta Apparel

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Delta Apparel has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong essential indicators, Delta Apparel is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Pfizer and Delta Apparel

The main advantage of trading using opposite Pfizer and Delta Apparel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, Delta Apparel 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 Delta Apparel will offset losses from the drop in Delta Apparel's long position.

The idea behind Pfizer Inc and Delta Apparel 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.