Correlation Between Netflix and LiveTiles
Can any of the company-specific risk be diversified away by investing in both Netflix and LiveTiles 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 LiveTiles into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Netflix and LiveTiles Limited, you can compare the effects of market volatilities on Netflix and LiveTiles 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 LiveTiles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netflix and LiveTiles.
Diversification Opportunities for Netflix and LiveTiles
Pay attention - limited upside
The 3 months correlation between Netflix and LiveTiles is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and LiveTiles Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LiveTiles Limited 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 LiveTiles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LiveTiles Limited has no effect on the direction of Netflix i.e., Netflix and LiveTiles go up and down completely randomly.
Pair Corralation between Netflix and LiveTiles
Given the investment horizon of 90 days Netflix is expected to generate 0.26 times more return on investment than LiveTiles. However, Netflix is 3.85 times less risky than LiveTiles. It trades about 0.1 of its potential returns per unit of risk. LiveTiles Limited is currently generating about -0.04 per unit of risk. If you would invest 32,034 in Netflix on September 3, 2024 and sell it today you would earn a total of 56,647 from holding Netflix or generate 176.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 89.49% |
| Values | Daily Returns |
Netflix vs. LiveTiles Limited
Performance |
| Timeline |
| Netflix |
| LiveTiles Limited |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Netflix and LiveTiles Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Netflix and LiveTiles
The main advantage of trading using opposite Netflix and LiveTiles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netflix position performs unexpectedly, LiveTiles 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 LiveTiles will offset losses from the drop in LiveTiles' long position.| Netflix vs. Paramount Global Class | Netflix vs. Roku Inc | Netflix vs. Warner Bros Discovery | Netflix vs. AMC Entertainment Holdings |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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