Correlation Between Netflix and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Netflix and Lord Abbett 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 Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Netflix and Lord Abbett Growth, you can compare the effects of market volatilities on Netflix and Lord Abbett 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 Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netflix and Lord Abbett.
Diversification Opportunities for Netflix and Lord Abbett
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Netflix and Lord is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and Lord Abbett Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Growth 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 Lord Abbett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lord Abbett Growth has no effect on the direction of Netflix i.e., Netflix and Lord Abbett go up and down completely randomly.
Pair Corralation between Netflix and Lord Abbett
Given the investment horizon of 90 days Netflix is expected to generate 1.17 times more return on investment than Lord Abbett. However, Netflix is 1.17 times more volatile than Lord Abbett Growth. It trades about 0.15 of its potential returns per unit of risk. Lord Abbett Growth is currently generating about 0.12 per unit of risk. If you would invest 65,027 in Netflix on September 3, 2024 and sell it today you would earn a total of 23,654 from holding Netflix or generate 36.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Netflix vs. Lord Abbett Growth
Performance |
| Timeline |
| Netflix |
| Lord Abbett Growth |
Netflix and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Netflix and Lord Abbett
The main advantage of trading using opposite Netflix and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netflix position performs unexpectedly, Lord Abbett 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 Lord Abbett will offset losses from the drop in Lord Abbett's long position.| Netflix vs. Paramount Global Class | Netflix vs. Roku Inc | Netflix vs. Warner Bros Discovery | Netflix vs. AMC Entertainment Holdings |
| Lord Abbett vs. Mid Cap Growth | Lord Abbett vs. Qs Moderate Growth | Lord Abbett vs. Champlain Mid Cap | Lord Abbett vs. Smallcap Growth Fund |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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