Correlation Between Netflix and Alpha HPA
Can any of the company-specific risk be diversified away by investing in both Netflix and Alpha HPA 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 Alpha HPA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Netflix and Alpha HPA, you can compare the effects of market volatilities on Netflix and Alpha HPA 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 Alpha HPA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netflix and Alpha HPA.
Diversification Opportunities for Netflix and Alpha HPA
Good diversification
The 3 months correlation between Netflix and Alpha is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and Alpha HPA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpha HPA 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 Alpha HPA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpha HPA has no effect on the direction of Netflix i.e., Netflix and Alpha HPA go up and down completely randomly.
Pair Corralation between Netflix and Alpha HPA
Given the investment horizon of 90 days Netflix is expected to generate 1.02 times more return on investment than Alpha HPA. However, Netflix is 1.02 times more volatile than Alpha HPA. It trades about 0.57 of its potential returns per unit of risk. Alpha HPA is currently generating about 0.04 per unit of risk. If you would invest 75,551 in Netflix on September 4, 2024 and sell it today you would earn a total of 14,223 from holding Netflix or generate 18.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Netflix vs. Alpha HPA
Performance |
| Timeline |
| Netflix |
| Alpha HPA |
Netflix and Alpha HPA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Netflix and Alpha HPA
The main advantage of trading using opposite Netflix and Alpha HPA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netflix position performs unexpectedly, Alpha HPA 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 Alpha HPA will offset losses from the drop in Alpha HPA's long position.| Netflix vs. Paramount Global Class | Netflix vs. Roku Inc | Netflix vs. Warner Bros Discovery | Netflix vs. AMC Entertainment Holdings |
| Alpha HPA vs. Magellan Financial Group | Alpha HPA vs. Black Rock Mining | Alpha HPA vs. Alto Metals | Alpha HPA vs. Prime Financial Group |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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