Correlation Between Netflix and SIG Combibloc
Can any of the company-specific risk be diversified away by investing in both Netflix and SIG Combibloc 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 SIG Combibloc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Netflix and SIG Combibloc Group, you can compare the effects of market volatilities on Netflix and SIG Combibloc 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 SIG Combibloc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netflix and SIG Combibloc.
Diversification Opportunities for Netflix and SIG Combibloc
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Netflix and SIG is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and SIG Combibloc Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIG Combibloc Group 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 SIG Combibloc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIG Combibloc Group has no effect on the direction of Netflix i.e., Netflix and SIG Combibloc go up and down completely randomly.
Pair Corralation between Netflix and SIG Combibloc
Given the investment horizon of 90 days Netflix is expected to generate 0.81 times more return on investment than SIG Combibloc. However, Netflix is 1.23 times less risky than SIG Combibloc. It trades about 0.11 of its potential returns per unit of risk. SIG Combibloc Group is currently generating about -0.03 per unit of risk. If you would invest 43,742 in Netflix on September 12, 2024 and sell it today you would earn a total of 47,593 from holding Netflix or generate 108.8% 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. SIG Combibloc Group
Performance |
| Timeline |
| Netflix |
| SIG Combibloc Group |
Netflix and SIG Combibloc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Netflix and SIG Combibloc
The main advantage of trading using opposite Netflix and SIG Combibloc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netflix position performs unexpectedly, SIG Combibloc 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 SIG Combibloc will offset losses from the drop in SIG Combibloc'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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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