Correlation Between Pfizer and Newell

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

By analyzing existing cross correlation between Pfizer Inc and Newell Brands 5375, you can compare the effects of market volatilities on Pfizer and Newell 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 Newell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and Newell.

Diversification Opportunities for Pfizer and Newell

0.24

Correlation Coefficient

Pfizer  Newell

Modest diversification

The 3 months correlation between Pfizer and Newell is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and Newell Brands 5375 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newell Brands 5375 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 Newell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newell Brands 5375 has no effect on the direction of Pfizer i.e., Pfizer and Newell go up and down completely randomly.

Pair Corralation between Pfizer and Newell

Considering the 90-day investment horizon Pfizer Inc is expected to generate 0.43 times more return on investment than Newell. However, Pfizer Inc is 2.32 times less risky than Newell. It trades about -0.14 of its potential returns per unit of risk. Newell Brands 5375 is currently generating about -0.07 per unit of risk. If you would invest  2,882  in Pfizer Inc on September 13, 2024 and sell it today you would lose (359.00) from holding Pfizer Inc or give up 12.46% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.83%
Values	Daily Returns

Pfizer Inc  vs.  Newell Brands 5375

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 abnormal performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Newell Brands 5375

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Newell Brands 5375 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for Newell Brands 5375 investors.

Pair Trading with Pfizer and Newell

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

The idea behind Pfizer Inc and Newell Brands 5375 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..