Correlation Between Netflix and Enduro Metals
Can any of the company-specific risk be diversified away by investing in both Netflix and Enduro Metals 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 Enduro Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Netflix and Enduro Metals, you can compare the effects of market volatilities on Netflix and Enduro Metals 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 Enduro Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netflix and Enduro Metals.
Diversification Opportunities for Netflix and Enduro Metals
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Netflix and Enduro is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and Enduro Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enduro Metals 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 Enduro Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enduro Metals has no effect on the direction of Netflix i.e., Netflix and Enduro Metals go up and down completely randomly.
Pair Corralation between Netflix and Enduro Metals
Given the investment horizon of 90 days Netflix is expected to generate 0.27 times more return on investment than Enduro Metals. However, Netflix is 3.69 times less risky than Enduro Metals. It trades about 0.16 of its potential returns per unit of risk. Enduro Metals is currently generating about -0.05 per unit of risk. If you would invest 63,379 in Netflix on August 31, 2024 and sell it today you would earn a total of 25,302 from holding Netflix or generate 39.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Netflix vs. Enduro Metals
Performance |
| Timeline |
| Netflix |
| Enduro Metals |
Netflix and Enduro Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Netflix and Enduro Metals
The main advantage of trading using opposite Netflix and Enduro Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netflix position performs unexpectedly, Enduro Metals 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 Enduro Metals will offset losses from the drop in Enduro Metals' long position.| Netflix vs. Paramount Global Class | Netflix vs. Roku Inc | Netflix vs. Warner Bros Discovery | Netflix vs. AMC Entertainment Holdings |
| Enduro Metals vs. Scottie Resources Corp | Enduro Metals vs. Defiance Silver Corp | Enduro Metals vs. HUMANA INC | Enduro Metals vs. SCOR PK |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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