Correlation Between Netflix and BNP PARIBAS
Can any of the company-specific risk be diversified away by investing in both Netflix and BNP PARIBAS 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 BNP PARIBAS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Netflix and BNP PARIBAS ADR, you can compare the effects of market volatilities on Netflix and BNP PARIBAS 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 BNP PARIBAS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netflix and BNP PARIBAS.
Diversification Opportunities for Netflix and BNP PARIBAS
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Netflix and BNP is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and BNP PARIBAS ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BNP PARIBAS ADR 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 BNP PARIBAS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BNP PARIBAS ADR has no effect on the direction of Netflix i.e., Netflix and BNP PARIBAS go up and down completely randomly.
Pair Corralation between Netflix and BNP PARIBAS
Given the investment horizon of 90 days Netflix is expected to generate 0.92 times more return on investment than BNP PARIBAS. However, Netflix is 1.08 times less risky than BNP PARIBAS. It trades about 0.55 of its potential returns per unit of risk. BNP PARIBAS ADR is currently generating about -0.33 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 | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Netflix vs. BNP PARIBAS ADR
Performance |
| Timeline |
| Netflix |
| BNP PARIBAS ADR |
Netflix and BNP PARIBAS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Netflix and BNP PARIBAS
The main advantage of trading using opposite Netflix and BNP PARIBAS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netflix position performs unexpectedly, BNP PARIBAS 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 BNP PARIBAS will offset losses from the drop in BNP PARIBAS's long position.| Netflix vs. Paramount Global Class | Netflix vs. Roku Inc | Netflix vs. Warner Bros Discovery | Netflix vs. AMC Entertainment Holdings |
| BNP PARIBAS vs. REGAL ASIAN INVESTMENTS | BNP PARIBAS vs. EAT WELL INVESTMENT | BNP PARIBAS vs. BII Railway Transportation | BNP PARIBAS vs. Gladstone Investment |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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