Correlation Between Netflix and Becle SAB
Can any of the company-specific risk be diversified away by investing in both Netflix and Becle SAB 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 Becle SAB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Netflix and Becle SAB de, you can compare the effects of market volatilities on Netflix and Becle SAB 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 Becle SAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netflix and Becle SAB.
Diversification Opportunities for Netflix and Becle SAB
Pay attention - limited upside
The 3 months correlation between Netflix and Becle is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and Becle SAB de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Becle SAB de 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 Becle SAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Becle SAB de has no effect on the direction of Netflix i.e., Netflix and Becle SAB go up and down completely randomly.
Pair Corralation between Netflix and Becle SAB
Assuming the 90 days trading horizon Netflix is expected to generate 1.07 times more return on investment than Becle SAB. However, Netflix is 1.07 times more volatile than Becle SAB de. It trades about 0.12 of its potential returns per unit of risk. Becle SAB de is currently generating about -0.04 per unit of risk. If you would invest 732,800 in Netflix on September 2, 2024 and sell it today you would earn a total of 1,074,200 from holding Netflix or generate 146.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Netflix vs. Becle SAB de
Performance |
| Timeline |
| Netflix |
| Becle SAB de |
Netflix and Becle SAB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Netflix and Becle SAB
The main advantage of trading using opposite Netflix and Becle SAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netflix position performs unexpectedly, Becle SAB 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 Becle SAB will offset losses from the drop in Becle SAB's long position.| Netflix vs. Ross Stores | Netflix vs. FIBRA Storage | Netflix vs. Cognizant Technology Solutions | Netflix vs. Micron Technology |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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