Correlation Between Netflix and Karoon Energy
Can any of the company-specific risk be diversified away by investing in both Netflix and Karoon Energy 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 Karoon Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Netflix and Karoon Energy, you can compare the effects of market volatilities on Netflix and Karoon Energy 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 Karoon Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netflix and Karoon Energy.
Diversification Opportunities for Netflix and Karoon Energy
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Netflix and Karoon is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and Karoon Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Karoon Energy 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 Karoon Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Karoon Energy has no effect on the direction of Netflix i.e., Netflix and Karoon Energy go up and down completely randomly.
Pair Corralation between Netflix and Karoon Energy
Given the investment horizon of 90 days Netflix is expected to generate 0.83 times more return on investment than Karoon Energy. However, Netflix is 1.2 times less risky than Karoon Energy. It trades about 0.29 of its potential returns per unit of risk. Karoon Energy is currently generating about -0.14 per unit of risk. If you would invest 71,300 in Netflix on September 12, 2024 and sell it today you would earn a total of 20,035 from holding Netflix or generate 28.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.35% |
| Values | Daily Returns |
Netflix vs. Karoon Energy
Performance |
| Timeline |
| Netflix |
| Karoon Energy |
Netflix and Karoon Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Netflix and Karoon Energy
The main advantage of trading using opposite Netflix and Karoon Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netflix position performs unexpectedly, Karoon Energy 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 Karoon Energy will offset losses from the drop in Karoon Energy's long position.| Netflix vs. Paramount Global Class | Netflix vs. Roku Inc | Netflix vs. Warner Bros Discovery | Netflix vs. AMC Entertainment Holdings |
| Karoon Energy vs. TAL Education Group | Karoon Energy vs. EEDUCATION ALBERT AB | Karoon Energy vs. Wayside Technology Group | Karoon Energy vs. SMA Solar Technology |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |