Correlation Between Netflix and Baoviet Securities
Can any of the company-specific risk be diversified away by investing in both Netflix and Baoviet Securities 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 Baoviet Securities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Netflix and Baoviet Securities, you can compare the effects of market volatilities on Netflix and Baoviet Securities 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 Baoviet Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netflix and Baoviet Securities.
Diversification Opportunities for Netflix and Baoviet Securities
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Netflix and Baoviet is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and Baoviet Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baoviet Securities 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 Baoviet Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baoviet Securities has no effect on the direction of Netflix i.e., Netflix and Baoviet Securities go up and down completely randomly.
Pair Corralation between Netflix and Baoviet Securities
Given the investment horizon of 90 days Netflix is expected to generate 0.71 times more return on investment than Baoviet Securities. However, Netflix is 1.4 times less risky than Baoviet Securities. It trades about 0.55 of its potential returns per unit of risk. Baoviet Securities is currently generating about -0.17 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Netflix vs. Baoviet Securities
Performance |
| Timeline |
| Netflix |
| Baoviet Securities |
Netflix and Baoviet Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Netflix and Baoviet Securities
The main advantage of trading using opposite Netflix and Baoviet Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netflix position performs unexpectedly, Baoviet Securities 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 Baoviet Securities will offset losses from the drop in Baoviet Securities' 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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