Correlation Between Netflix and Invesco American
Can any of the company-specific risk be diversified away by investing in both Netflix and Invesco American 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 Invesco American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Netflix and Invesco American Value, you can compare the effects of market volatilities on Netflix and Invesco American 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 Invesco American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netflix and Invesco American.
Diversification Opportunities for Netflix and Invesco American
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Netflix and Invesco is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and Invesco American Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco American Value 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 Invesco American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco American Value has no effect on the direction of Netflix i.e., Netflix and Invesco American go up and down completely randomly.
Pair Corralation between Netflix and Invesco American
Given the investment horizon of 90 days Netflix is expected to generate 0.45 times more return on investment than Invesco American. However, Netflix is 2.24 times less risky than Invesco American. It trades about 0.11 of its potential returns per unit of risk. Invesco American Value is currently generating about -0.14 per unit of risk. If you would invest 31,783 in Netflix on September 4, 2024 and sell it today you would earn a total of 58,434 from holding Netflix or generate 183.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 9.29% |
| Values | Daily Returns |
Netflix vs. Invesco American Value
Performance |
| Timeline |
| Netflix |
| Invesco American Value |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Netflix and Invesco American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Netflix and Invesco American
The main advantage of trading using opposite Netflix and Invesco American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netflix position performs unexpectedly, Invesco American 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 Invesco American will offset losses from the drop in Invesco American's 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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