Correlation Between Netflix and Suominen Oyj
Can any of the company-specific risk be diversified away by investing in both Netflix and Suominen Oyj 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 Suominen Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Netflix and Suominen Oyj, you can compare the effects of market volatilities on Netflix and Suominen Oyj 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 Suominen Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netflix and Suominen Oyj.
Diversification Opportunities for Netflix and Suominen Oyj
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Netflix and Suominen is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and Suominen Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suominen Oyj 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 Suominen Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suominen Oyj has no effect on the direction of Netflix i.e., Netflix and Suominen Oyj go up and down completely randomly.
Pair Corralation between Netflix and Suominen Oyj
Given the investment horizon of 90 days Netflix is expected to generate 0.97 times more return on investment than Suominen Oyj. However, Netflix is 1.03 times less risky than Suominen Oyj. It trades about 0.12 of its potential returns per unit of risk. Suominen Oyj is currently generating about -0.02 per unit of risk. If you would invest 29,775 in Netflix on September 12, 2024 and sell it today you would earn a total of 61,560 from holding Netflix or generate 206.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Netflix vs. Suominen Oyj
Performance |
| Timeline |
| Netflix |
| Suominen Oyj |
Netflix and Suominen Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Netflix and Suominen Oyj
The main advantage of trading using opposite Netflix and Suominen Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netflix position performs unexpectedly, Suominen Oyj 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 Suominen Oyj will offset losses from the drop in Suominen Oyj's long position.| Netflix vs. Paramount Global Class | Netflix vs. Roku Inc | Netflix vs. Warner Bros Discovery | Netflix vs. AMC Entertainment Holdings |
| Suominen Oyj vs. Tokmanni Group Oyj | Suominen Oyj vs. Kemira Oyj | Suominen Oyj vs. Telia Company AB | Suominen Oyj vs. Outokumpu Oyj |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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