Correlation Between Netflix and Grupo Herdez
Can any of the company-specific risk be diversified away by investing in both Netflix and Grupo Herdez 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 Grupo Herdez into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Netflix and Grupo Herdez SAB, you can compare the effects of market volatilities on Netflix and Grupo Herdez 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 Grupo Herdez. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netflix and Grupo Herdez.
Diversification Opportunities for Netflix and Grupo Herdez
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Netflix and Grupo is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and Grupo Herdez SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Herdez SAB 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 Grupo Herdez. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Herdez SAB has no effect on the direction of Netflix i.e., Netflix and Grupo Herdez go up and down completely randomly.
Pair Corralation between Netflix and Grupo Herdez
Assuming the 90 days trading horizon Netflix is expected to generate 0.78 times more return on investment than Grupo Herdez. However, Netflix is 1.28 times less risky than Grupo Herdez. It trades about 0.43 of its potential returns per unit of risk. Grupo Herdez SAB is currently generating about 0.07 per unit of risk. If you would invest 1,527,800 in Netflix on September 4, 2024 and sell it today you would earn a total of 300,500 from holding Netflix or generate 19.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Netflix vs. Grupo Herdez SAB
Performance |
| Timeline |
| Netflix |
| Grupo Herdez SAB |
Netflix and Grupo Herdez Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Netflix and Grupo Herdez
The main advantage of trading using opposite Netflix and Grupo Herdez positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netflix position performs unexpectedly, Grupo Herdez 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 Grupo Herdez will offset losses from the drop in Grupo Herdez's long position.| Netflix vs. Costco Wholesale | Netflix vs. United Airlines Holdings | Netflix vs. Monster Beverage Corp | Netflix vs. Grupo Sports World |
| Grupo Herdez vs. Genworth Financial | Grupo Herdez vs. Verizon Communications | Grupo Herdez vs. Ross Stores | Grupo Herdez vs. Prudential Financial |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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