Correlation Between Netflix and Aena SME
Can any of the company-specific risk be diversified away by investing in both Netflix and Aena SME 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 Aena SME into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Netflix and Aena SME SA, you can compare the effects of market volatilities on Netflix and Aena SME 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 Aena SME. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netflix and Aena SME.
Diversification Opportunities for Netflix and Aena SME
Good diversification
The 3 months correlation between Netflix and Aena is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and Aena SME SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aena SME SA 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 Aena SME. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aena SME SA has no effect on the direction of Netflix i.e., Netflix and Aena SME go up and down completely randomly.
Pair Corralation between Netflix and Aena SME
Given the investment horizon of 90 days Netflix is expected to generate 1.09 times more return on investment than Aena SME. However, Netflix is 1.09 times more volatile than Aena SME SA. It trades about 0.55 of its potential returns per unit of risk. Aena SME SA is currently generating about -0.02 per unit of risk. If you would invest 75,551 in Netflix on September 3, 2024 and sell it today you would earn a total of 13,130 from holding Netflix or generate 17.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Netflix vs. Aena SME SA
Performance |
| Timeline |
| Netflix |
| Aena SME SA |
Netflix and Aena SME Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Netflix and Aena SME
The main advantage of trading using opposite Netflix and Aena SME positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netflix position performs unexpectedly, Aena SME 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 Aena SME will offset losses from the drop in Aena SME'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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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