Correlation Between Netflix and Diamyd Medical
Can any of the company-specific risk be diversified away by investing in both Netflix and Diamyd Medical 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 Diamyd Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Netflix and Diamyd Medical AB, you can compare the effects of market volatilities on Netflix and Diamyd Medical 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 Diamyd Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netflix and Diamyd Medical.
Diversification Opportunities for Netflix and Diamyd Medical
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Netflix and Diamyd is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and Diamyd Medical AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diamyd Medical AB 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 Diamyd Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diamyd Medical AB has no effect on the direction of Netflix i.e., Netflix and Diamyd Medical go up and down completely randomly.
Pair Corralation between Netflix and Diamyd Medical
Assuming the 90 days horizon Netflix is expected to generate 0.37 times more return on investment than Diamyd Medical. However, Netflix is 2.67 times less risky than Diamyd Medical. It trades about 0.53 of its potential returns per unit of risk. Diamyd Medical AB is currently generating about 0.09 per unit of risk. If you would invest 69,550 in Netflix on September 3, 2024 and sell it today you would earn a total of 14,200 from holding Netflix or generate 20.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Netflix vs. Diamyd Medical AB
Performance |
| Timeline |
| Netflix |
| Diamyd Medical AB |
Netflix and Diamyd Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Netflix and Diamyd Medical
The main advantage of trading using opposite Netflix and Diamyd Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netflix position performs unexpectedly, Diamyd Medical 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 Diamyd Medical will offset losses from the drop in Diamyd Medical's long position.The idea behind Netflix and Diamyd Medical AB 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.| Diamyd Medical vs. WIMFARM SA EO | Diamyd Medical vs. Tencent Music Entertainment | Diamyd Medical vs. ULTRA CLEAN HLDGS | Diamyd Medical vs. AGRICULTBK HADR25 YC |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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