Correlation Between Netflix and Asia Tech
Can any of the company-specific risk be diversified away by investing in both Netflix and Asia Tech 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 Asia Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Netflix and Asia Tech Image, you can compare the effects of market volatilities on Netflix and Asia Tech 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 Asia Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netflix and Asia Tech.
Diversification Opportunities for Netflix and Asia Tech
Pay attention - limited upside
The 3 months correlation between Netflix and Asia is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and Asia Tech Image in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Tech Image 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 Asia Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Tech Image has no effect on the direction of Netflix i.e., Netflix and Asia Tech go up and down completely randomly.
Pair Corralation between Netflix and Asia Tech
Given the investment horizon of 90 days Netflix is expected to generate 0.94 times more return on investment than Asia Tech. However, Netflix is 1.07 times less risky than Asia Tech. It trades about 0.45 of its potential returns per unit of risk. Asia Tech Image is currently generating about -0.11 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 Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Netflix vs. Asia Tech Image
Performance |
| Timeline |
| Netflix |
| Asia Tech Image |
Netflix and Asia Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Netflix and Asia Tech
The main advantage of trading using opposite Netflix and Asia Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netflix position performs unexpectedly, Asia Tech 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 Asia Tech will offset losses from the drop in Asia Tech's long position.| Netflix vs. Paramount Global Class | Netflix vs. Roku Inc | Netflix vs. Warner Bros Discovery | Netflix vs. AMC Entertainment Holdings |
| Asia Tech vs. ANJI Technology Co | Asia Tech vs. Emerging Display Technologies | Asia Tech vs. U Tech Media Corp | Asia Tech vs. Ruentex Development Co |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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