Correlation Between Netflix and MKS Instruments
Can any of the company-specific risk be diversified away by investing in both Netflix and MKS Instruments 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 MKS Instruments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Netflix and MKS Instruments, you can compare the effects of market volatilities on Netflix and MKS Instruments 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 MKS Instruments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netflix and MKS Instruments.
Diversification Opportunities for Netflix and MKS Instruments
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Netflix and MKS is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and MKS Instruments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MKS Instruments 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 MKS Instruments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MKS Instruments has no effect on the direction of Netflix i.e., Netflix and MKS Instruments go up and down completely randomly.
Pair Corralation between Netflix and MKS Instruments
Given the investment horizon of 90 days Netflix is expected to generate 0.68 times more return on investment than MKS Instruments. However, Netflix is 1.47 times less risky than MKS Instruments. It trades about 0.45 of its potential returns per unit of risk. MKS Instruments is currently generating about -0.06 per unit of risk. If you would invest 80,544 in Netflix on September 12, 2024 and sell it today you would earn a total of 13,486 from holding Netflix or generate 16.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Netflix vs. MKS Instruments
Performance |
| Timeline |
| Netflix |
| MKS Instruments |
Netflix and MKS Instruments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Netflix and MKS Instruments
The main advantage of trading using opposite Netflix and MKS Instruments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netflix position performs unexpectedly, MKS Instruments 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 MKS Instruments will offset losses from the drop in MKS Instruments' long position.| Netflix vs. Paramount Global Class | Netflix vs. Roku Inc | Netflix vs. Warner Bros Discovery | Netflix vs. AMC Entertainment Holdings |
| MKS Instruments vs. HEXAGON AB ADR1 | MKS Instruments vs. Superior Plus Corp | MKS Instruments vs. SIVERS SEMICONDUCTORS AB | MKS Instruments vs. NorAm Drilling AS |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |