Correlation Between Netflix and EDISON
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By analyzing existing cross correlation between Netflix and EDISON INTL 4125, you can compare the effects of market volatilities on Netflix and EDISON 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 EDISON. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netflix and EDISON.
Diversification Opportunities for Netflix and EDISON
Pay attention - limited upside
The 3 months correlation between Netflix and EDISON is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and EDISON INTL 4125 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EDISON INTL 4125 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 EDISON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EDISON INTL 4125 has no effect on the direction of Netflix i.e., Netflix and EDISON go up and down completely randomly.
Pair Corralation between Netflix and EDISON
Given the investment horizon of 90 days Netflix is expected to generate 2.46 times more return on investment than EDISON. However, Netflix is 2.46 times more volatile than EDISON INTL 4125. It trades about 0.23 of its potential returns per unit of risk. EDISON INTL 4125 is currently generating about -0.05 per unit of risk. If you would invest 67,532 in Netflix on September 2, 2024 and sell it today you would earn a total of 21,149 from holding Netflix or generate 31.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.31% |
| Values | Daily Returns |
Netflix vs. EDISON INTL 4125
Performance |
| Timeline |
| Netflix |
| EDISON INTL 4125 |
Netflix and EDISON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Netflix and EDISON
The main advantage of trading using opposite Netflix and EDISON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netflix position performs unexpectedly, EDISON 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 EDISON will offset losses from the drop in EDISON's long position.| Netflix vs. Paramount Global Class | Netflix vs. Roku Inc | Netflix vs. Warner Bros Discovery | Netflix vs. AMC Entertainment Holdings |
| EDISON vs. AEP TEX INC | EDISON vs. US BANK NATIONAL | EDISON vs. International Business Machines | EDISON vs. Intel |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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