Correlation Between Netflix and HeadsUp Entertainment
Can any of the company-specific risk be diversified away by investing in both Netflix and HeadsUp Entertainment 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 HeadsUp Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Netflix and HeadsUp Entertainment International, you can compare the effects of market volatilities on Netflix and HeadsUp Entertainment 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 HeadsUp Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netflix and HeadsUp Entertainment.
Diversification Opportunities for Netflix and HeadsUp Entertainment
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Netflix and HeadsUp is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and HeadsUp Entertainment Internat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HeadsUp Entertainment 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 HeadsUp Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HeadsUp Entertainment has no effect on the direction of Netflix i.e., Netflix and HeadsUp Entertainment go up and down completely randomly.
Pair Corralation between Netflix and HeadsUp Entertainment
Given the investment horizon of 90 days Netflix is expected to generate 0.12 times more return on investment than HeadsUp Entertainment. However, Netflix is 8.07 times less risky than HeadsUp Entertainment. It trades about 0.65 of its potential returns per unit of risk. HeadsUp Entertainment International is currently generating about 0.04 per unit of risk. If you would invest 75,455 in Netflix on August 25, 2024 and sell it today you would earn a total of 14,324 from holding Netflix or generate 18.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Netflix vs. HeadsUp Entertainment Internat
Performance |
| Timeline |
| Netflix |
| HeadsUp Entertainment |
Netflix and HeadsUp Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Netflix and HeadsUp Entertainment
The main advantage of trading using opposite Netflix and HeadsUp Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netflix position performs unexpectedly, HeadsUp Entertainment 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 HeadsUp Entertainment will offset losses from the drop in HeadsUp Entertainment's long position.| Netflix vs. Paramount Global Class | Netflix vs. Roku Inc | Netflix vs. Warner Bros Discovery | Netflix vs. AMC Entertainment Holdings |
| HeadsUp Entertainment vs. Universal Media Group | HeadsUp Entertainment vs. QYOU Media | HeadsUp Entertainment vs. Ggtoor Inc | HeadsUp Entertainment vs. Pop Culture Group |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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