Correlation Between Netflix and SGS SA
Can any of the company-specific risk be diversified away by investing in both Netflix and SGS SA 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 SGS SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Netflix and SGS SA, you can compare the effects of market volatilities on Netflix and SGS SA 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 SGS SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netflix and SGS SA.
Diversification Opportunities for Netflix and SGS SA
Pay attention - limited upside
The 3 months correlation between Netflix and SGS is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and SGS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SGS SA 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 SGS SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SGS SA has no effect on the direction of Netflix i.e., Netflix and SGS SA go up and down completely randomly.
Pair Corralation between Netflix and SGS SA
Given the investment horizon of 90 days Netflix is expected to generate 0.63 times more return on investment than SGS SA. However, Netflix is 1.58 times less risky than SGS SA. It trades about 0.69 of its potential returns per unit of risk. SGS SA is currently generating about -0.25 per unit of risk. If you would invest 74,929 in Netflix on August 24, 2024 and sell it today you would earn a total of 14,819 from holding Netflix or generate 19.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Netflix vs. SGS SA
Performance |
| Timeline |
| Netflix |
| SGS SA |
Netflix and SGS SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Netflix and SGS SA
The main advantage of trading using opposite Netflix and SGS SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netflix position performs unexpectedly, SGS SA 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 SGS SA will offset losses from the drop in SGS SA's long position.| Netflix vs. Paramount Global Class | Netflix vs. Roku Inc | Netflix vs. Warner Bros Discovery | Netflix vs. AMC Entertainment Holdings |
| SGS SA vs. Analog Devices | SGS SA vs. Amkor Technology | SGS SA vs. Arrow Electronics | SGS SA vs. Nok Airlines Public |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |