Correlation Between Netflix and Invesco Senior
Can any of the company-specific risk be diversified away by investing in both Netflix and Invesco Senior 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 Invesco Senior into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Netflix and Invesco Senior Loan, you can compare the effects of market volatilities on Netflix and Invesco Senior 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 Invesco Senior. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netflix and Invesco Senior.
Diversification Opportunities for Netflix and Invesco Senior
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Netflix and Invesco is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and Invesco Senior Loan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Senior Loan 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 Invesco Senior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Senior Loan has no effect on the direction of Netflix i.e., Netflix and Invesco Senior go up and down completely randomly.
Pair Corralation between Netflix and Invesco Senior
Given the investment horizon of 90 days Netflix is expected to generate 8.66 times more return on investment than Invesco Senior. However, Netflix is 8.66 times more volatile than Invesco Senior Loan. It trades about 0.06 of its potential returns per unit of risk. Invesco Senior Loan is currently generating about -0.3 per unit of risk. If you would invest 89,017 in Netflix on January 12, 2025 and sell it today you would earn a total of 2,812 from holding Netflix or generate 3.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Netflix vs. Invesco Senior Loan
Performance |
| Timeline |
| Netflix |
| Invesco Senior Loan |
Netflix and Invesco Senior Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Netflix and Invesco Senior
The main advantage of trading using opposite Netflix and Invesco Senior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netflix position performs unexpectedly, Invesco Senior 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 Invesco Senior will offset losses from the drop in Invesco Senior's long position.| Netflix vs. Paramount Global Class | Netflix vs. Roku Inc | Netflix vs. Warner Bros Discovery | Netflix vs. AMC Entertainment Holdings |
| Invesco Senior vs. Jhancock Global Thematic | Invesco Senior vs. Doubleline Global Bond | Invesco Senior vs. Ab Global Risk | Invesco Senior vs. Morningstar Global Income |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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