Correlation Between Netflix and Kantone Holdings
Can any of the company-specific risk be diversified away by investing in both Netflix and Kantone Holdings 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 Kantone Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Netflix and Kantone Holdings Limited, you can compare the effects of market volatilities on Netflix and Kantone Holdings 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 Kantone Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netflix and Kantone Holdings.
Diversification Opportunities for Netflix and Kantone Holdings
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Netflix and Kantone is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and Kantone Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kantone Holdings 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 Kantone Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kantone Holdings has no effect on the direction of Netflix i.e., Netflix and Kantone Holdings go up and down completely randomly.
Pair Corralation between Netflix and Kantone Holdings
Given the investment horizon of 90 days Netflix is expected to generate 2.5 times less return on investment than Kantone Holdings. But when comparing it to its historical volatility, Netflix is 6.99 times less risky than Kantone Holdings. It trades about 0.11 of its potential returns per unit of risk. Kantone Holdings Limited is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 6.00 in Kantone Holdings Limited on September 2, 2024 and sell it today you would lose (1.00) from holding Kantone Holdings Limited or give up 16.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Netflix vs. Kantone Holdings Limited
Performance |
| Timeline |
| Netflix |
| Kantone Holdings |
Netflix and Kantone Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Netflix and Kantone Holdings
The main advantage of trading using opposite Netflix and Kantone Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netflix position performs unexpectedly, Kantone Holdings 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 Kantone Holdings will offset losses from the drop in Kantone Holdings' long position.| Netflix vs. Paramount Global Class | Netflix vs. Roku Inc | Netflix vs. Warner Bros Discovery | Netflix vs. AMC Entertainment Holdings |
| Kantone Holdings vs. The Travelers Companies | Kantone Holdings vs. Walt Disney | Kantone Holdings vs. Home Depot | Kantone Holdings vs. Procter Gamble |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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