Correlation Between Pfizer and Immatics

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

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

Diversification Opportunities for Pfizer and Immatics

0.86

Correlation Coefficient

Pfizer  Immatics

Very poor diversification

The 3 months correlation between Pfizer and Immatics is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and Immatics NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Immatics NV 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 Immatics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Immatics NV has no effect on the direction of Pfizer i.e., Pfizer and Immatics go up and down completely randomly.

Pair Corralation between Pfizer and Immatics

Considering the 90-day investment horizon Pfizer Inc is expected to generate 0.53 times more return on investment than Immatics. However, Pfizer Inc is 1.9 times less risky than Immatics. It trades about -0.1 of its potential returns per unit of risk. Immatics NV is currently generating about -0.27 per unit of risk. If you would invest  2,921  in Pfizer Inc on September 19, 2024 and sell it today you would lose (278.00) from holding Pfizer Inc or give up 9.52% of portfolio value over 90 days.

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

Pfizer Inc  vs.  Immatics NV

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 uncertain 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.

Immatics NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Immatics NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly 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 the company investors.

Pair Trading with Pfizer and Immatics

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

The idea behind Pfizer Inc and Immatics NV 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.