Correlation Between Netflix and World Copper
Can any of the company-specific risk be diversified away by investing in both Netflix and World Copper 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 World Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Netflix and World Copper, you can compare the effects of market volatilities on Netflix and World Copper 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 World Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netflix and World Copper.
Diversification Opportunities for Netflix and World Copper
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Netflix and World is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and World Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on World Copper 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 World Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of World Copper has no effect on the direction of Netflix i.e., Netflix and World Copper go up and down completely randomly.
Pair Corralation between Netflix and World Copper
Given the investment horizon of 90 days Netflix is expected to generate 0.23 times more return on investment than World Copper. However, Netflix is 4.28 times less risky than World Copper. It trades about 0.15 of its potential returns per unit of risk. World Copper is currently generating about -0.1 per unit of risk. If you would invest 65,027 in Netflix on September 3, 2024 and sell it today you would earn a total of 23,654 from holding Netflix or generate 36.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Netflix vs. World Copper
Performance |
| Timeline |
| Netflix |
| World Copper |
Netflix and World Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Netflix and World Copper
The main advantage of trading using opposite Netflix and World Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netflix position performs unexpectedly, World Copper 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 World Copper will offset losses from the drop in World Copper's long position.| Netflix vs. Paramount Global Class | Netflix vs. Roku Inc | Netflix vs. Warner Bros Discovery | Netflix vs. AMC Entertainment Holdings |
| World Copper vs. Hot Chili Limited | World Copper vs. Three Valley Copper | World Copper vs. Los Andes Copper | World Copper vs. QC Copper and |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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