Correlation Between Netflix and Tsingtao Brewery
Can any of the company-specific risk be diversified away by investing in both Netflix and Tsingtao Brewery 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 Tsingtao Brewery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Netflix and Tsingtao Brewery, you can compare the effects of market volatilities on Netflix and Tsingtao Brewery 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 Tsingtao Brewery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netflix and Tsingtao Brewery.
Diversification Opportunities for Netflix and Tsingtao Brewery
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Netflix and Tsingtao is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and Tsingtao Brewery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tsingtao Brewery 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 Tsingtao Brewery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tsingtao Brewery has no effect on the direction of Netflix i.e., Netflix and Tsingtao Brewery go up and down completely randomly.
Pair Corralation between Netflix and Tsingtao Brewery
Given the investment horizon of 90 days Netflix is expected to generate 0.52 times more return on investment than Tsingtao Brewery. However, Netflix is 1.92 times less risky than Tsingtao Brewery. It trades about 0.57 of its potential returns per unit of risk. Tsingtao Brewery is currently generating about 0.03 per unit of risk. If you would invest 75,551 in Netflix on September 4, 2024 and sell it today you would earn a total of 14,223 from holding Netflix or generate 18.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Netflix vs. Tsingtao Brewery
Performance |
| Timeline |
| Netflix |
| Tsingtao Brewery |
Netflix and Tsingtao Brewery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Netflix and Tsingtao Brewery
The main advantage of trading using opposite Netflix and Tsingtao Brewery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netflix position performs unexpectedly, Tsingtao Brewery 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 Tsingtao Brewery will offset losses from the drop in Tsingtao Brewery's long position.| Netflix vs. Paramount Global Class | Netflix vs. Roku Inc | Netflix vs. Warner Bros Discovery | Netflix vs. AMC Entertainment Holdings |
| Tsingtao Brewery vs. Heineken Holding NV | Tsingtao Brewery vs. Asahi Group Holdings | Tsingtao Brewery vs. Kirin 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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