Correlation Between Netflix and Leverage Shares
Can any of the company-specific risk be diversified away by investing in both Netflix and Leverage Shares 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 Leverage Shares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Netflix and Leverage Shares 2x, you can compare the effects of market volatilities on Netflix and Leverage Shares 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 Leverage Shares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netflix and Leverage Shares.
Diversification Opportunities for Netflix and Leverage Shares
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Netflix and Leverage is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and Leverage Shares 2x in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leverage Shares 2x 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 Leverage Shares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leverage Shares 2x has no effect on the direction of Netflix i.e., Netflix and Leverage Shares go up and down completely randomly.
Pair Corralation between Netflix and Leverage Shares
Given the investment horizon of 90 days Netflix is expected to generate 1.01 times more return on investment than Leverage Shares. However, Netflix is 1.01 times more volatile than Leverage Shares 2x. It trades about 0.45 of its potential returns per unit of risk. Leverage Shares 2x is currently generating about 0.45 per unit of risk. If you would invest 80,544 in Netflix on September 12, 2024 and sell it today you would earn a total of 13,486 from holding Netflix or generate 16.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Netflix vs. Leverage Shares 2x
Performance |
| Timeline |
| Netflix |
| Leverage Shares 2x |
Netflix and Leverage Shares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Netflix and Leverage Shares
The main advantage of trading using opposite Netflix and Leverage Shares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netflix position performs unexpectedly, Leverage Shares 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 Leverage Shares will offset losses from the drop in Leverage Shares' long position.| Netflix vs. Paramount Global Class | Netflix vs. Roku Inc | Netflix vs. Warner Bros Discovery | Netflix vs. AMC Entertainment Holdings |
| Leverage Shares vs. SPDR Dow Jones | Leverage Shares vs. iShares Core MSCI | Leverage Shares vs. iShares SP 500 | Leverage Shares vs. Vanguard FTSE All World |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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