Correlation Between Netflix and Roadzen
Can any of the company-specific risk be diversified away by investing in both Netflix and Roadzen 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 Roadzen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Netflix and Roadzen, you can compare the effects of market volatilities on Netflix and Roadzen 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 Roadzen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netflix and Roadzen.
Diversification Opportunities for Netflix and Roadzen
Excellent diversification
The 3 months correlation between Netflix and Roadzen is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and Roadzen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roadzen 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 Roadzen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roadzen has no effect on the direction of Netflix i.e., Netflix and Roadzen go up and down completely randomly.
Pair Corralation between Netflix and Roadzen
Given the investment horizon of 90 days Netflix is expected to generate 0.16 times more return on investment than Roadzen. However, Netflix is 6.36 times less risky than Roadzen. It trades about 0.17 of its potential returns per unit of risk. Roadzen is currently generating about -0.04 per unit of risk. If you would invest 59,697 in Netflix on September 3, 2024 and sell it today you would earn a total of 28,984 from holding Netflix or generate 48.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Netflix vs. Roadzen
Performance |
| Timeline |
| Netflix |
| Roadzen |
Netflix and Roadzen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Netflix and Roadzen
The main advantage of trading using opposite Netflix and Roadzen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netflix position performs unexpectedly, Roadzen 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 Roadzen will offset losses from the drop in Roadzen's long position.| Netflix vs. Paramount Global Class | Netflix vs. Roku Inc | Netflix vs. Warner Bros Discovery | Netflix vs. AMC Entertainment Holdings |
| Roadzen vs. Unity Software | Roadzen vs. Daily Journal Corp | Roadzen vs. C3 Ai Inc | Roadzen vs. A2Z Smart Technologies |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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