Correlation Between Vericel Corp and Pfizer

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

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

Diversification Opportunities for Vericel Corp and Pfizer

0.78

Correlation Coefficient

Vericel Corp  Pfizer

Poor diversification

The 3 months correlation between Vericel and Pfizer is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Vericel Corp Ord and Pfizer Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pfizer Inc and Vericel Corp 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 Vericel Corp Ord 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 Vericel Corp i.e., Vericel Corp and Pfizer go up and down completely randomly.

Pair Corralation between Vericel Corp and Pfizer

Given the investment horizon of 90 days Vericel Corp Ord is expected to generate 1.83 times more return on investment than Pfizer. However, Vericel Corp is 1.83 times more volatile than Pfizer Inc. It trades about 0.0 of its potential returns per unit of risk. Pfizer Inc is currently generating about -0.02 per unit of risk. If you would invest  4,797  in Vericel Corp Ord on February 19, 2025 and sell it today you would lose (445.00) from holding Vericel Corp Ord or give up 9.28% of portfolio value over 90 days.

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

Vericel Corp Ord  vs.  Pfizer Inc

Vericel Corp Ord

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vericel Corp Ord has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in June 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

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. In spite of latest conflicting 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.

Pair Trading with Vericel Corp and Pfizer

The main advantage of trading using opposite Vericel Corp and Pfizer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vericel Corp 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 Vericel Corp Ord 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.