Correlation Between Netflix and BitFrontier Capital
Can any of the company-specific risk be diversified away by investing in both Netflix and BitFrontier Capital 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 BitFrontier Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Netflix and BitFrontier Capital Holdings, you can compare the effects of market volatilities on Netflix and BitFrontier Capital 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 BitFrontier Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netflix and BitFrontier Capital.
Diversification Opportunities for Netflix and BitFrontier Capital
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Netflix and BitFrontier is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and BitFrontier Capital Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BitFrontier Capital 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 BitFrontier Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BitFrontier Capital has no effect on the direction of Netflix i.e., Netflix and BitFrontier Capital go up and down completely randomly.
Pair Corralation between Netflix and BitFrontier Capital
Given the investment horizon of 90 days Netflix is expected to generate 1.84 times less return on investment than BitFrontier Capital. But when comparing it to its historical volatility, Netflix is 8.06 times less risky than BitFrontier Capital. It trades about 0.15 of its potential returns per unit of risk. BitFrontier Capital Holdings is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 0.91 in BitFrontier Capital Holdings on August 25, 2024 and sell it today you would lose (0.64) from holding BitFrontier Capital Holdings or give up 70.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Netflix vs. BitFrontier Capital Holdings
Performance |
| Timeline |
| Netflix |
| BitFrontier Capital |
Netflix and BitFrontier Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Netflix and BitFrontier Capital
The main advantage of trading using opposite Netflix and BitFrontier Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netflix position performs unexpectedly, BitFrontier Capital 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 BitFrontier Capital will offset losses from the drop in BitFrontier Capital's long position.| Netflix vs. Paramount Global Class | Netflix vs. Roku Inc | Netflix vs. Warner Bros Discovery | Netflix vs. AMC Entertainment Holdings |
| BitFrontier Capital vs. Morgan Stanley | BitFrontier Capital vs. Goldman Sachs Group | BitFrontier Capital vs. Charles Schwab Corp | BitFrontier Capital vs. Interactive Brokers 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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