Correlation Between Netflix and METISA Metalrgica
Can any of the company-specific risk be diversified away by investing in both Netflix and METISA Metalrgica 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 METISA Metalrgica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Netflix and METISA Metalrgica Timboense, you can compare the effects of market volatilities on Netflix and METISA Metalrgica 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 METISA Metalrgica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netflix and METISA Metalrgica.
Diversification Opportunities for Netflix and METISA Metalrgica
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Netflix and METISA is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and METISA Metalrgica Timboense in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on METISA Metalrgica 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 METISA Metalrgica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of METISA Metalrgica has no effect on the direction of Netflix i.e., Netflix and METISA Metalrgica go up and down completely randomly.
Pair Corralation between Netflix and METISA Metalrgica
Assuming the 90 days trading horizon Netflix is expected to generate 0.83 times more return on investment than METISA Metalrgica. However, Netflix is 1.2 times less risky than METISA Metalrgica. It trades about 0.36 of its potential returns per unit of risk. METISA Metalrgica Timboense is currently generating about -0.08 per unit of risk. If you would invest 7,655 in Netflix on August 28, 2024 and sell it today you would earn a total of 2,536 from holding Netflix or generate 33.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Netflix vs. METISA Metalrgica Timboense
Performance |
| Timeline |
| Netflix |
| METISA Metalrgica |
Netflix and METISA Metalrgica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Netflix and METISA Metalrgica
The main advantage of trading using opposite Netflix and METISA Metalrgica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netflix position performs unexpectedly, METISA Metalrgica 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 METISA Metalrgica will offset losses from the drop in METISA Metalrgica's long position.| Netflix vs. Energisa SA | Netflix vs. BTG Pactual Logstica | Netflix vs. Plano Plano Desenvolvimento | Netflix vs. Companhia Habitasul de |
| METISA Metalrgica vs. Fras le SA | METISA Metalrgica vs. Indstrias Romi SA | METISA Metalrgica vs. Clave Indices De | METISA Metalrgica vs. BTG Pactual Logstica |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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