Correlation Between Netflix and INFICON Holding
Can any of the company-specific risk be diversified away by investing in both Netflix and INFICON Holding 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 INFICON Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Netflix and INFICON Holding AG, you can compare the effects of market volatilities on Netflix and INFICON Holding 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 INFICON Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netflix and INFICON Holding.
Diversification Opportunities for Netflix and INFICON Holding
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Netflix and INFICON is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and INFICON Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INFICON Holding AG 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 INFICON Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INFICON Holding AG has no effect on the direction of Netflix i.e., Netflix and INFICON Holding go up and down completely randomly.
Pair Corralation between Netflix and INFICON Holding
Given the investment horizon of 90 days Netflix is expected to generate 0.24 times more return on investment than INFICON Holding. However, Netflix is 4.13 times less risky than INFICON Holding. It trades about 0.41 of its potential returns per unit of risk. INFICON Holding AG is currently generating about -0.21 per unit of risk. If you would invest 81,950 in Netflix on September 13, 2024 and sell it today you would earn a total of 11,706 from holding Netflix or generate 14.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Netflix vs. INFICON Holding AG
Performance |
| Timeline |
| Netflix |
| INFICON Holding AG |
Netflix and INFICON Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Netflix and INFICON Holding
The main advantage of trading using opposite Netflix and INFICON Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netflix position performs unexpectedly, INFICON Holding 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 INFICON Holding will offset losses from the drop in INFICON Holding's long position.| Netflix vs. Paramount Global Class | Netflix vs. Roku Inc | Netflix vs. Warner Bros Discovery | Netflix vs. AMC Entertainment Holdings |
| INFICON Holding vs. Copa Holdings SA | INFICON Holding vs. United Airlines Holdings | INFICON Holding vs. Delta Air Lines | INFICON Holding vs. SkyWest |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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