Correlation Between Curtiss Motorcycles and Netflix
Can any of the company-specific risk be diversified away by investing in both Curtiss Motorcycles and Netflix 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 Curtiss Motorcycles and Netflix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Curtiss Motorcycles and Netflix, you can compare the effects of market volatilities on Curtiss Motorcycles and Netflix 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 Curtiss Motorcycles with a short position of Netflix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Curtiss Motorcycles and Netflix.
Diversification Opportunities for Curtiss Motorcycles and Netflix
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Curtiss and Netflix is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Curtiss Motorcycles and Netflix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Netflix and Curtiss Motorcycles 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 Curtiss Motorcycles are associated (or correlated) with Netflix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Netflix has no effect on the direction of Curtiss Motorcycles i.e., Curtiss Motorcycles and Netflix go up and down completely randomly.
Pair Corralation between Curtiss Motorcycles and Netflix
Given the investment horizon of 90 days Curtiss Motorcycles is expected to generate 19.91 times more return on investment than Netflix. However, Curtiss Motorcycles is 19.91 times more volatile than Netflix. It trades about 0.19 of its potential returns per unit of risk. Netflix is currently generating about 0.07 per unit of risk. If you would invest 2.40 in Curtiss Motorcycles on November 29, 2024 and sell it today you would earn a total of 2.00 from holding Curtiss Motorcycles or generate 83.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Curtiss Motorcycles vs. Netflix
Performance |
| Timeline |
| Curtiss Motorcycles |
| Netflix |
Curtiss Motorcycles and Netflix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Curtiss Motorcycles and Netflix
The main advantage of trading using opposite Curtiss Motorcycles and Netflix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Curtiss Motorcycles position performs unexpectedly, Netflix 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 Netflix will offset losses from the drop in Netflix's long position.| Curtiss Motorcycles vs. Life Electric Vehicles | Curtiss Motorcycles vs. Evil Empire Designs | Curtiss Motorcycles vs. Twin Vee Powercats | Curtiss Motorcycles vs. LCI Industries |
| Netflix vs. Paramount Global Class | Netflix vs. Roku Inc | Netflix vs. Warner Bros Discovery | Netflix vs. AMC Entertainment Holdings |
Check out your portfolio center.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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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