Correlation Between Netflix and Sinopec Oilfield
Can any of the company-specific risk be diversified away by investing in both Netflix and Sinopec Oilfield 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 Sinopec Oilfield into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Netflix and Sinopec Oilfield Service, you can compare the effects of market volatilities on Netflix and Sinopec Oilfield 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 Sinopec Oilfield. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netflix and Sinopec Oilfield.
Diversification Opportunities for Netflix and Sinopec Oilfield
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Netflix and Sinopec is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and Sinopec Oilfield Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinopec Oilfield Service 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 Sinopec Oilfield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinopec Oilfield Service has no effect on the direction of Netflix i.e., Netflix and Sinopec Oilfield go up and down completely randomly.
Pair Corralation between Netflix and Sinopec Oilfield
If you would invest 75,551 in Netflix on September 4, 2024 and sell it today you would earn a total of 14,223 from holding Netflix or generate 18.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Netflix vs. Sinopec Oilfield Service
Performance |
| Timeline |
| Netflix |
| Sinopec Oilfield Service |
Netflix and Sinopec Oilfield Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Netflix and Sinopec Oilfield
The main advantage of trading using opposite Netflix and Sinopec Oilfield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netflix position performs unexpectedly, Sinopec Oilfield 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 Sinopec Oilfield will offset losses from the drop in Sinopec Oilfield's long position.| Netflix vs. Paramount Global Class | Netflix vs. Roku Inc | Netflix vs. Warner Bros Discovery | Netflix vs. AMC Entertainment Holdings |
| Sinopec Oilfield vs. Apple Inc | Sinopec Oilfield vs. Microsoft | Sinopec Oilfield vs. Amazon Inc | Sinopec Oilfield vs. Alphabet Inc Class C |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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