Correlation Between Netflix and TINC Comm
Can any of the company-specific risk be diversified away by investing in both Netflix and TINC Comm 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 TINC Comm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Netflix and TINC Comm VA, you can compare the effects of market volatilities on Netflix and TINC Comm 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 TINC Comm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netflix and TINC Comm.
Diversification Opportunities for Netflix and TINC Comm
Pay attention - limited upside
The 3 months correlation between Netflix and TINC is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and TINC Comm VA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TINC Comm VA 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 TINC Comm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TINC Comm VA has no effect on the direction of Netflix i.e., Netflix and TINC Comm go up and down completely randomly.
Pair Corralation between Netflix and TINC Comm
Given the investment horizon of 90 days Netflix is expected to generate 1.84 times more return on investment than TINC Comm. However, Netflix is 1.84 times more volatile than TINC Comm VA. It trades about 0.15 of its potential returns per unit of risk. TINC Comm VA is currently generating about 0.0 per unit of risk. If you would invest 48,612 in Netflix on September 12, 2024 and sell it today you would earn a total of 42,723 from holding Netflix or generate 87.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 98.8% |
| Values | Daily Returns |
Netflix vs. TINC Comm VA
Performance |
| Timeline |
| Netflix |
| TINC Comm VA |
Netflix and TINC Comm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Netflix and TINC Comm
The main advantage of trading using opposite Netflix and TINC Comm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netflix position performs unexpectedly, TINC Comm 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 TINC Comm will offset losses from the drop in TINC Comm's long position.| Netflix vs. Paramount Global Class | Netflix vs. Roku Inc | Netflix vs. Warner Bros Discovery | Netflix vs. AMC Entertainment Holdings |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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