Correlation Between Netflix and Generation Alpha
Can any of the company-specific risk be diversified away by investing in both Netflix and Generation Alpha 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 Generation Alpha into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Netflix and Generation Alpha, you can compare the effects of market volatilities on Netflix and Generation Alpha 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 Generation Alpha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netflix and Generation Alpha.
Diversification Opportunities for Netflix and Generation Alpha
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Netflix and Generation is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and Generation Alpha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Generation Alpha 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 Generation Alpha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Generation Alpha has no effect on the direction of Netflix i.e., Netflix and Generation Alpha go up and down completely randomly.
Pair Corralation between Netflix and Generation Alpha
If you would invest 80,544 in Netflix on September 12, 2024 and sell it today you would earn a total of 13,486 from holding Netflix or generate 16.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Netflix vs. Generation Alpha
Performance |
| Timeline |
| Netflix |
| Generation Alpha |
Netflix and Generation Alpha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Netflix and Generation Alpha
The main advantage of trading using opposite Netflix and Generation Alpha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netflix position performs unexpectedly, Generation Alpha 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 Generation Alpha will offset losses from the drop in Generation Alpha's long position.| Netflix vs. Paramount Global Class | Netflix vs. Roku Inc | Netflix vs. Warner Bros Discovery | Netflix vs. AMC Entertainment Holdings |
| Generation Alpha vs. King Resources | Generation Alpha vs. Dais Analytic Corp | Generation Alpha vs. Polar Power | Generation Alpha vs. Ozop Surgical Corp |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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