Correlation Between Companhia Habitasul and Netflix
Can any of the company-specific risk be diversified away by investing in both Companhia Habitasul 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 Companhia Habitasul and Netflix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Companhia Habitasul de and Netflix, you can compare the effects of market volatilities on Companhia Habitasul 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 Companhia Habitasul with a short position of Netflix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Companhia Habitasul and Netflix.
Diversification Opportunities for Companhia Habitasul and Netflix
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Companhia and Netflix is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Companhia Habitasul de and Netflix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Netflix and Companhia Habitasul 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 Companhia Habitasul de 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 Companhia Habitasul i.e., Companhia Habitasul and Netflix go up and down completely randomly.
Pair Corralation between Companhia Habitasul and Netflix
Assuming the 90 days trading horizon Companhia Habitasul de is expected to under-perform the Netflix. In addition to that, Companhia Habitasul is 1.86 times more volatile than Netflix. It trades about -0.09 of its total potential returns per unit of risk. Netflix is currently generating about 0.37 per unit of volatility. If you would invest 7,727 in Netflix on August 30, 2024 and sell it today you would earn a total of 2,707 from holding Netflix or generate 35.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.62% |
| Values | Daily Returns |
Companhia Habitasul de vs. Netflix
Performance |
| Timeline |
| Companhia Habitasul |
| Netflix |
Companhia Habitasul and Netflix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Companhia Habitasul and Netflix
The main advantage of trading using opposite Companhia Habitasul and Netflix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Companhia Habitasul 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.| Companhia Habitasul vs. Hotis Othon SA | Companhia Habitasul vs. Hrcules SA | Companhia Habitasul vs. Eucatex SA Indstria | Companhia Habitasul vs. General Shopping e |
| Netflix vs. Electronic Arts | Netflix vs. Tyson Foods | Netflix vs. Palantir Technologies | Netflix vs. Dell Technologies |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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