Correlation Between Roku and Network Media
Can any of the company-specific risk be diversified away by investing in both Roku and Network Media 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 Roku and Network Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Roku Inc and Network Media Group, you can compare the effects of market volatilities on Roku and Network Media 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 Roku with a short position of Network Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roku and Network Media.
Diversification Opportunities for Roku and Network Media
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Roku and Network is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Roku Inc and Network Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Network Media Group and Roku 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 Roku Inc are associated (or correlated) with Network Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Network Media Group has no effect on the direction of Roku i.e., Roku and Network Media go up and down completely randomly.
Pair Corralation between Roku and Network Media
Given the investment horizon of 90 days Roku Inc is expected to generate 0.57 times more return on investment than Network Media. However, Roku Inc is 1.75 times less risky than Network Media. It trades about 0.01 of its potential returns per unit of risk. Network Media Group is currently generating about -0.02 per unit of risk. If you would invest 8,665 in Roku Inc on October 7, 2024 and sell it today you would lose (927.00) from holding Roku Inc or give up 10.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Roku Inc vs. Network Media Group
Performance |
| Timeline |
| Roku Inc |
| Network Media Group |
Roku and Network Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Roku and Network Media
The main advantage of trading using opposite Roku and Network Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roku position performs unexpectedly, Network Media 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 Network Media will offset losses from the drop in Network Media's long position.| Roku vs. Walt Disney | Roku vs. AMC Entertainment Holdings | Roku vs. Paramount Global Class | Roku vs. Warner Bros Discovery |
| Network Media vs. Netflix | Network Media vs. Walt Disney | Network Media vs. Universal Music Group | Network Media vs. Live Nation Entertainment |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |