Correlation Between Netflix and Aberdeen Gbl
Can any of the company-specific risk be diversified away by investing in both Netflix and Aberdeen Gbl 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 Aberdeen Gbl into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Netflix and Aberdeen Gbl Small, you can compare the effects of market volatilities on Netflix and Aberdeen Gbl 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 Aberdeen Gbl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netflix and Aberdeen Gbl.
Diversification Opportunities for Netflix and Aberdeen Gbl
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Netflix and Aberdeen is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and Aberdeen Gbl Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Gbl Small 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 Aberdeen Gbl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Gbl Small has no effect on the direction of Netflix i.e., Netflix and Aberdeen Gbl go up and down completely randomly.
Pair Corralation between Netflix and Aberdeen Gbl
Given the investment horizon of 90 days Netflix is expected to generate 2.12 times more return on investment than Aberdeen Gbl. However, Netflix is 2.12 times more volatile than Aberdeen Gbl Small. It trades about 0.45 of its potential returns per unit of risk. Aberdeen Gbl Small is currently generating about 0.04 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Netflix vs. Aberdeen Gbl Small
Performance |
| Timeline |
| Netflix |
| Aberdeen Gbl Small |
Netflix and Aberdeen Gbl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Netflix and Aberdeen Gbl
The main advantage of trading using opposite Netflix and Aberdeen Gbl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netflix position performs unexpectedly, Aberdeen Gbl 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 Aberdeen Gbl will offset losses from the drop in Aberdeen Gbl's long position.| Netflix vs. Paramount Global Class | Netflix vs. Roku Inc | Netflix vs. Warner Bros Discovery | Netflix vs. AMC Entertainment Holdings |
| Aberdeen Gbl vs. Virtus Real Estate | Aberdeen Gbl vs. Dunham Real Estate | Aberdeen Gbl vs. Simt Real Estate | Aberdeen Gbl vs. Short Real Estate |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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