Correlation Between Netflix and Amcor Plc
Can any of the company-specific risk be diversified away by investing in both Netflix and Amcor Plc 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 Amcor Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Netflix and Amcor plc, you can compare the effects of market volatilities on Netflix and Amcor Plc 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 Amcor Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netflix and Amcor Plc.
Diversification Opportunities for Netflix and Amcor Plc
Good diversification
The 3 months correlation between Netflix and Amcor is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and Amcor plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amcor plc 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 Amcor Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amcor plc has no effect on the direction of Netflix i.e., Netflix and Amcor Plc go up and down completely randomly.
Pair Corralation between Netflix and Amcor Plc
Given the investment horizon of 90 days Netflix is expected to generate 0.79 times more return on investment than Amcor Plc. However, Netflix is 1.26 times less risky than Amcor Plc. It trades about 0.11 of its potential returns per unit of risk. Amcor plc is currently generating about 0.02 per unit of risk. If you would invest 31,783 in Netflix on September 4, 2024 and sell it today you would earn a total of 57,991 from holding Netflix or generate 182.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.21% |
| Values | Daily Returns |
Netflix vs. Amcor plc
Performance |
| Timeline |
| Netflix |
| Amcor plc |
Netflix and Amcor Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Netflix and Amcor Plc
The main advantage of trading using opposite Netflix and Amcor Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netflix position performs unexpectedly, Amcor Plc 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 Amcor Plc will offset losses from the drop in Amcor Plc's long position.| Netflix vs. Paramount Global Class | Netflix vs. Roku Inc | Netflix vs. Warner Bros Discovery | Netflix vs. AMC Entertainment Holdings |
| Amcor Plc vs. SCANSOURCE | Amcor Plc vs. Sunstone Hotel Investors | Amcor Plc vs. INTERCONT HOTELS | Amcor Plc vs. Renesas Electronics |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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