Correlation Between Netflix and Granite Construction
Can any of the company-specific risk be diversified away by investing in both Netflix and Granite Construction 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 Granite Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Netflix and Granite Construction Incorporated, you can compare the effects of market volatilities on Netflix and Granite Construction 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 Granite Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netflix and Granite Construction.
Diversification Opportunities for Netflix and Granite Construction
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Netflix and Granite is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and Granite Construction Incorpora in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Granite Construction 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 Granite Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Granite Construction has no effect on the direction of Netflix i.e., Netflix and Granite Construction go up and down completely randomly.
Pair Corralation between Netflix and Granite Construction
Given the investment horizon of 90 days Netflix is expected to generate 1.22 times more return on investment than Granite Construction. However, Netflix is 1.22 times more volatile than Granite Construction Incorporated. It trades about 0.11 of its potential returns per unit of risk. Granite Construction Incorporated is currently generating about 0.13 per unit of risk. If you would invest 30,556 in Netflix on August 27, 2024 and sell it today you would earn a total of 59,223 from holding Netflix or generate 193.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Netflix vs. Granite Construction Incorpora
Performance |
| Timeline |
| Netflix |
| Granite Construction |
Netflix and Granite Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Netflix and Granite Construction
The main advantage of trading using opposite Netflix and Granite Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netflix position performs unexpectedly, Granite Construction 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 Granite Construction will offset losses from the drop in Granite Construction's long position.| Netflix vs. Paramount Global Class | Netflix vs. Roku Inc | Netflix vs. Warner Bros Discovery | Netflix vs. AMC Entertainment Holdings |
| Granite Construction vs. EMCOR Group | Granite Construction vs. Comfort Systems USA | Granite Construction vs. Primoris Services | Granite Construction vs. Construction Partners |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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