Correlation Between Netflix and LOWES
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By analyzing existing cross correlation between Netflix and LOWES PANIES INC, you can compare the effects of market volatilities on Netflix and LOWES 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 LOWES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netflix and LOWES.
Diversification Opportunities for Netflix and LOWES
Excellent diversification
The 3 months correlation between Netflix and LOWES is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and LOWES PANIES INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LOWES PANIES INC 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 LOWES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LOWES PANIES INC has no effect on the direction of Netflix i.e., Netflix and LOWES go up and down completely randomly.
Pair Corralation between Netflix and LOWES
Given the investment horizon of 90 days Netflix is expected to generate 0.68 times more return on investment than LOWES. However, Netflix is 1.47 times less risky than LOWES. It trades about 0.45 of its potential returns per unit of risk. LOWES PANIES INC is currently generating about -0.03 per unit of risk. If you would invest 80,544 in Netflix on September 12, 2024 and sell it today you would earn a total of 13,486 from holding Netflix or generate 16.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Netflix vs. LOWES PANIES INC
Performance |
| Timeline |
| Netflix |
| LOWES PANIES INC |
Netflix and LOWES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Netflix and LOWES
The main advantage of trading using opposite Netflix and LOWES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netflix position performs unexpectedly, LOWES 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 LOWES will offset losses from the drop in LOWES's long position.| Netflix vs. Paramount Global Class | Netflix vs. Roku Inc | Netflix vs. Warner Bros Discovery | Netflix vs. AMC Entertainment Holdings |
| LOWES vs. Relx PLC ADR | LOWES vs. Bright Scholar Education | LOWES vs. Xponential Fitness | LOWES vs. Daily Journal Corp |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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