Correlation Between Netflix and COGNA EDUCACAO
Can any of the company-specific risk be diversified away by investing in both Netflix and COGNA EDUCACAO 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 COGNA EDUCACAO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Netflix and COGNA EDUCACAO SPADR, you can compare the effects of market volatilities on Netflix and COGNA EDUCACAO 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 COGNA EDUCACAO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netflix and COGNA EDUCACAO.
Diversification Opportunities for Netflix and COGNA EDUCACAO
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Netflix and COGNA is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and COGNA EDUCACAO SPADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COGNA EDUCACAO SPADR 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 COGNA EDUCACAO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COGNA EDUCACAO SPADR has no effect on the direction of Netflix i.e., Netflix and COGNA EDUCACAO go up and down completely randomly.
Pair Corralation between Netflix and COGNA EDUCACAO
Given the investment horizon of 90 days Netflix is expected to generate 0.18 times more return on investment than COGNA EDUCACAO. However, Netflix is 5.53 times less risky than COGNA EDUCACAO. It trades about 0.15 of its potential returns per unit of risk. COGNA EDUCACAO SPADR is currently generating about 0.03 per unit of risk. If you would invest 45,989 in Netflix on September 4, 2024 and sell it today you would earn a total of 44,228 from holding Netflix or generate 96.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.41% |
| Values | Daily Returns |
Netflix vs. COGNA EDUCACAO SPADR
Performance |
| Timeline |
| Netflix |
| COGNA EDUCACAO SPADR |
Netflix and COGNA EDUCACAO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Netflix and COGNA EDUCACAO
The main advantage of trading using opposite Netflix and COGNA EDUCACAO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netflix position performs unexpectedly, COGNA EDUCACAO 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 COGNA EDUCACAO will offset losses from the drop in COGNA EDUCACAO's long position.| Netflix vs. Paramount Global Class | Netflix vs. Roku Inc | Netflix vs. Warner Bros Discovery | Netflix vs. AMC Entertainment Holdings |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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