Correlation Between Netflix and PT Global
Can any of the company-specific risk be diversified away by investing in both Netflix and PT Global 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 Netflix and PT Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Netflix and PT Global Mediacom, you can compare the effects of market volatilities on Netflix and PT Global 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 Netflix with a short position of PT Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netflix and PT Global.
Diversification Opportunities for Netflix and PT Global
Excellent diversification
The 3 months correlation between Netflix and 06L is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and PT Global Mediacom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Global Mediacom and Netflix 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 Netflix are associated (or correlated) with PT Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Global Mediacom has no effect on the direction of Netflix i.e., Netflix and PT Global go up and down completely randomly.
Pair Corralation between Netflix and PT Global
Assuming the 90 days horizon Netflix is expected to generate 0.86 times more return on investment than PT Global. However, Netflix is 1.16 times less risky than PT Global. It trades about 0.22 of its potential returns per unit of risk. PT Global Mediacom is currently generating about -0.03 per unit of risk. If you would invest 63,500 in Netflix on September 2, 2024 and sell it today you would earn a total of 20,250 from holding Netflix or generate 31.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Netflix vs. PT Global Mediacom
Performance |
| Timeline |
| Netflix |
| PT Global Mediacom |
Netflix and PT Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Netflix and PT Global
The main advantage of trading using opposite Netflix and PT Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netflix position performs unexpectedly, PT Global 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 PT Global will offset losses from the drop in PT Global's long position.| Netflix vs. Sanyo Chemical Industries | Netflix vs. Datadog | Netflix vs. TERADATA | Netflix vs. Mitsubishi Gas Chemical |
| PT Global vs. Netflix | PT Global vs. Warner Music Group | PT Global vs. Superior Plus Corp | PT Global vs. NMI 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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