Correlation Between Dupont De and Netflix
Can any of the company-specific risk be diversified away by investing in both Dupont De 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 Dupont De and Netflix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dupont De Nemours and Netflix, you can compare the effects of market volatilities on Dupont De 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 Dupont De with a short position of Netflix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Netflix.
Diversification Opportunities for Dupont De and Netflix
Good diversification
The 3 months correlation between Dupont and Netflix is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Netflix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Netflix and Dupont De 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 Dupont De Nemours 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 Dupont De i.e., Dupont De and Netflix go up and down completely randomly.
Pair Corralation between Dupont De and Netflix
Allowing for the 90-day total investment horizon Dupont De is expected to generate 106.88 times less return on investment than Netflix. But when comparing it to its historical volatility, Dupont De Nemours is 1.09 times less risky than Netflix. It trades about 0.01 of its potential returns per unit of risk. Netflix is currently generating about 0.49 of returns per unit of risk over similar time horizon. If you would invest 69,280 in Netflix on August 29, 2024 and sell it today you would earn a total of 14,010 from holding Netflix or generate 20.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dupont De Nemours vs. Netflix
Performance |
| Timeline |
| Dupont De Nemours |
| Netflix |
Dupont De and Netflix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Netflix
The main advantage of trading using opposite Dupont De and Netflix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De 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.| Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide | Dupont De vs. LyondellBasell Industries NV |
| Netflix vs. The Walt Disney | Netflix vs. Superior Plus Corp | Netflix vs. NMI Holdings | Netflix vs. Origin Agritech |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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