Correlation Between Netflix and MRG Metals
Can any of the company-specific risk be diversified away by investing in both Netflix and MRG Metals 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 MRG Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Netflix and MRG Metals, you can compare the effects of market volatilities on Netflix and MRG Metals 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 MRG Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netflix and MRG Metals.
Diversification Opportunities for Netflix and MRG Metals
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Netflix and MRG is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and MRG Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MRG Metals 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 MRG Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MRG Metals has no effect on the direction of Netflix i.e., Netflix and MRG Metals go up and down completely randomly.
Pair Corralation between Netflix and MRG Metals
Given the investment horizon of 90 days Netflix is expected to generate 24.08 times less return on investment than MRG Metals. But when comparing it to its historical volatility, Netflix is 10.24 times less risky than MRG Metals. It trades about 0.03 of its potential returns per unit of risk. MRG Metals is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 0.40 in MRG Metals on December 1, 2024 and sell it today you would earn a total of 0.00 from holding MRG Metals or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Netflix vs. MRG Metals
Performance |
| Timeline |
| Netflix |
| MRG Metals |
Netflix and MRG Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Netflix and MRG Metals
The main advantage of trading using opposite Netflix and MRG Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netflix position performs unexpectedly, MRG Metals 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 MRG Metals will offset losses from the drop in MRG Metals' 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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