Correlation Between Netflix and SOUTHERN
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By analyzing existing cross correlation between Netflix and SOUTHERN CALIF EDISON, you can compare the effects of market volatilities on Netflix and SOUTHERN 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 SOUTHERN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netflix and SOUTHERN.
Diversification Opportunities for Netflix and SOUTHERN
Pay attention - limited upside
The 3 months correlation between Netflix and SOUTHERN is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and SOUTHERN CALIF EDISON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOUTHERN CALIF EDISON 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 SOUTHERN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOUTHERN CALIF EDISON has no effect on the direction of Netflix i.e., Netflix and SOUTHERN go up and down completely randomly.
Pair Corralation between Netflix and SOUTHERN
Given the investment horizon of 90 days Netflix is expected to generate 1.11 times more return on investment than SOUTHERN. However, Netflix is 1.11 times more volatile than SOUTHERN CALIF EDISON. It trades about 0.58 of its potential returns per unit of risk. SOUTHERN CALIF EDISON is currently generating about -0.18 per unit of risk. If you would invest 75,551 in Netflix on September 5, 2024 and sell it today you would earn a total of 14,666 from holding Netflix or generate 19.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Netflix vs. SOUTHERN CALIF EDISON
Performance |
| Timeline |
| Netflix |
| SOUTHERN CALIF EDISON |
Netflix and SOUTHERN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Netflix and SOUTHERN
The main advantage of trading using opposite Netflix and SOUTHERN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netflix position performs unexpectedly, SOUTHERN 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 SOUTHERN will offset losses from the drop in SOUTHERN's long position.| Netflix vs. Paramount Global Class | Netflix vs. Roku Inc | Netflix vs. Warner Bros Discovery | Netflix vs. AMC Entertainment Holdings |
| SOUTHERN vs. Park Ohio Holdings | SOUTHERN vs. Primoris Services | SOUTHERN vs. Griffon | SOUTHERN vs. AKITA Drilling |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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