Correlation Between Netflix and Promotora
Can any of the company-specific risk be diversified away by investing in both Netflix and Promotora 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 Promotora into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Netflix and Promotora de Informaciones, you can compare the effects of market volatilities on Netflix and Promotora 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 Promotora. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netflix and Promotora.
Diversification Opportunities for Netflix and Promotora
Weak diversification
The 3 months correlation between Netflix and Promotora is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and Promotora de Informaciones in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Promotora de Informa 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 Promotora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Promotora de Informa has no effect on the direction of Netflix i.e., Netflix and Promotora go up and down completely randomly.
Pair Corralation between Netflix and Promotora
Given the investment horizon of 90 days Netflix is expected to generate 0.94 times more return on investment than Promotora. However, Netflix is 1.06 times less risky than Promotora. It trades about 0.11 of its potential returns per unit of risk. Promotora de Informaciones is currently generating about 0.0 per unit of risk. If you would invest 43,470 in Netflix on September 12, 2024 and sell it today you would earn a total of 47,865 from holding Netflix or generate 110.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.9% |
| Values | Daily Returns |
Netflix vs. Promotora de Informaciones
Performance |
| Timeline |
| Netflix |
| Promotora de Informa |
Netflix and Promotora Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Netflix and Promotora
The main advantage of trading using opposite Netflix and Promotora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netflix position performs unexpectedly, Promotora 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 Promotora will offset losses from the drop in Promotora's long position.| Netflix vs. Paramount Global Class | Netflix vs. Roku Inc | Netflix vs. Warner Bros Discovery | Netflix vs. AMC Entertainment Holdings |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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