Correlation Between Netflix and Voestalpine
Can any of the company-specific risk be diversified away by investing in both Netflix and Voestalpine 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 Voestalpine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Netflix and Voestalpine AG PK, you can compare the effects of market volatilities on Netflix and Voestalpine 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 Voestalpine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netflix and Voestalpine.
Diversification Opportunities for Netflix and Voestalpine
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Netflix and Voestalpine is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and Voestalpine AG PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voestalpine AG PK 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 Voestalpine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voestalpine AG PK has no effect on the direction of Netflix i.e., Netflix and Voestalpine go up and down completely randomly.
Pair Corralation between Netflix and Voestalpine
Given the investment horizon of 90 days Netflix is expected to under-perform the Voestalpine. But the etf apears to be less risky and, when comparing its historical volatility, Netflix is 2.12 times less risky than Voestalpine. The etf trades about -0.21 of its potential returns per unit of risk. The Voestalpine AG PK is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 403.00 in Voestalpine AG PK on December 7, 2024 and sell it today you would earn a total of 117.00 from holding Voestalpine AG PK or generate 29.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Netflix vs. Voestalpine AG PK
Performance |
| Timeline |
| Netflix |
| Voestalpine AG PK |
Netflix and Voestalpine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Netflix and Voestalpine
The main advantage of trading using opposite Netflix and Voestalpine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netflix position performs unexpectedly, Voestalpine 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 Voestalpine will offset losses from the drop in Voestalpine's long position.| Netflix vs. Paramount Global Class | Netflix vs. Roku Inc | Netflix vs. Warner Bros Discovery | Netflix vs. AMC Entertainment Holdings |
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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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