Correlation Between Netflix and EON SE
Can any of the company-specific risk be diversified away by investing in both Netflix and EON SE 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 EON SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Netflix and EON SE, you can compare the effects of market volatilities on Netflix and EON SE 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 EON SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netflix and EON SE.
Diversification Opportunities for Netflix and EON SE
Pay attention - limited upside
The 3 months correlation between Netflix and EON is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and EON SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EON SE 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 EON SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EON SE has no effect on the direction of Netflix i.e., Netflix and EON SE go up and down completely randomly.
Pair Corralation between Netflix and EON SE
Given the investment horizon of 90 days Netflix is expected to generate 0.91 times more return on investment than EON SE. However, Netflix is 1.1 times less risky than EON SE. It trades about 0.55 of its potential returns per unit of risk. EON SE is currently generating about -0.09 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 | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Netflix vs. EON SE
Performance |
| Timeline |
| Netflix |
| EON SE |
Netflix and EON SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Netflix and EON SE
The main advantage of trading using opposite Netflix and EON SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netflix position performs unexpectedly, EON SE 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 EON SE will offset losses from the drop in EON SE's long position.| Netflix vs. Paramount Global Class | Netflix vs. Roku Inc | Netflix vs. Warner Bros Discovery | Netflix vs. AMC Entertainment Holdings |
| EON SE vs. KENEDIX OFFICE INV | EON SE vs. WillScot Mobile Mini | EON SE vs. QUEEN S ROAD | EON SE vs. Broadwind |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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