Correlation Between Netflix and Xtrackers Russell
Can any of the company-specific risk be diversified away by investing in both Netflix and Xtrackers Russell 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 Xtrackers Russell into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Netflix and Xtrackers Russell 2000, you can compare the effects of market volatilities on Netflix and Xtrackers Russell 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 Xtrackers Russell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netflix and Xtrackers Russell.
Diversification Opportunities for Netflix and Xtrackers Russell
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Netflix and Xtrackers is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and Xtrackers Russell 2000 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers Russell 2000 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 Xtrackers Russell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers Russell 2000 has no effect on the direction of Netflix i.e., Netflix and Xtrackers Russell go up and down completely randomly.
Pair Corralation between Netflix and Xtrackers Russell
Given the investment horizon of 90 days Netflix is expected to generate 0.41 times more return on investment than Xtrackers Russell. However, Netflix is 2.44 times less risky than Xtrackers Russell. It trades about 0.61 of its potential returns per unit of risk. Xtrackers Russell 2000 is currently generating about 0.21 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 15,555 from holding Netflix or generate 20.59% 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. Xtrackers Russell 2000
Performance |
| Timeline |
| Netflix |
| Xtrackers Russell 2000 |
Netflix and Xtrackers Russell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Netflix and Xtrackers Russell
The main advantage of trading using opposite Netflix and Xtrackers Russell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netflix position performs unexpectedly, Xtrackers Russell 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 Xtrackers Russell will offset losses from the drop in Xtrackers Russell's long position.| Netflix vs. Paramount Global Class | Netflix vs. Roku Inc | Netflix vs. Warner Bros Discovery | Netflix vs. AMC Entertainment Holdings |
| Xtrackers Russell vs. Xtrackers MSCI USA | Xtrackers Russell vs. Xtrackers USD Corporate | Xtrackers Russell vs. Xtrackers MSCI AC | Xtrackers Russell vs. Xtrackers MSCI World |
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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