Correlation Between Netflix and Bassac
Can any of the company-specific risk be diversified away by investing in both Netflix and Bassac 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 Bassac into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Netflix and Bassac, you can compare the effects of market volatilities on Netflix and Bassac 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 Bassac. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netflix and Bassac.
Diversification Opportunities for Netflix and Bassac
Very weak diversification
The 3 months correlation between Netflix and Bassac is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and Bassac in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bassac 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 Bassac. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bassac has no effect on the direction of Netflix i.e., Netflix and Bassac go up and down completely randomly.
Pair Corralation between Netflix and Bassac
Given the investment horizon of 90 days Netflix is expected to generate 1.27 times more return on investment than Bassac. However, Netflix is 1.27 times more volatile than Bassac. It trades about 0.1 of its potential returns per unit of risk. Bassac is currently generating about 0.0 per unit of risk. If you would invest 32,034 in Netflix on September 3, 2024 and sell it today you would earn a total of 56,647 from holding Netflix or generate 176.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.02% |
| Values | Daily Returns |
Netflix vs. Bassac
Performance |
| Timeline |
| Netflix |
| Bassac |
Netflix and Bassac Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Netflix and Bassac
The main advantage of trading using opposite Netflix and Bassac positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netflix position performs unexpectedly, Bassac 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 Bassac will offset losses from the drop in Bassac's long position.| Netflix vs. Paramount Global Class | Netflix vs. Roku Inc | Netflix vs. Warner Bros Discovery | Netflix vs. AMC Entertainment Holdings |
| Bassac vs. Piscines Desjoyaux SA | Bassac vs. Akwel SA | Bassac vs. Groupe Guillin SA | Bassac vs. Thermador Groupe SA |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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