Correlation Between Netflix and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Netflix and Goldman Sachs 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 Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Netflix and Goldman Sachs Gqg, you can compare the effects of market volatilities on Netflix and Goldman Sachs 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 Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netflix and Goldman Sachs.
Diversification Opportunities for Netflix and Goldman Sachs
-0.92 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Netflix and Goldman is -0.92. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and Goldman Sachs Gqg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Gqg 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 Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs Gqg has no effect on the direction of Netflix i.e., Netflix and Goldman Sachs go up and down completely randomly.
Pair Corralation between Netflix and Goldman Sachs
Given the investment horizon of 90 days Netflix is expected to generate 2.12 times more return on investment than Goldman Sachs. However, Netflix is 2.12 times more volatile than Goldman Sachs Gqg. It trades about 0.57 of its potential returns per unit of risk. Goldman Sachs Gqg is currently generating about -0.14 per unit of risk. If you would invest 75,551 in Netflix on September 4, 2024 and sell it today you would earn a total of 14,223 from holding Netflix or generate 18.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Netflix vs. Goldman Sachs Gqg
Performance |
| Timeline |
| Netflix |
| Goldman Sachs Gqg |
Netflix and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Netflix and Goldman Sachs
The main advantage of trading using opposite Netflix and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netflix position performs unexpectedly, Goldman Sachs 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 Goldman Sachs will offset losses from the drop in Goldman Sachs' long position.| Netflix vs. Paramount Global Class | Netflix vs. Roku Inc | Netflix vs. Warner Bros Discovery | Netflix vs. AMC Entertainment Holdings |
| Goldman Sachs vs. Qs Large Cap | Goldman Sachs vs. Old Westbury Large | Goldman Sachs vs. William Blair Large | Goldman Sachs vs. Touchstone Large Cap |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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