Correlation Between United Amern and Netflix
Can any of the company-specific risk be diversified away by investing in both United Amern and Netflix 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 United Amern and Netflix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Amern Pete and Netflix, you can compare the effects of market volatilities on United Amern and Netflix 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 United Amern with a short position of Netflix. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Amern and Netflix.
Diversification Opportunities for United Amern and Netflix
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between United and Netflix is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding United Amern Pete and Netflix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Netflix and United Amern 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 United Amern Pete are associated (or correlated) with Netflix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Netflix has no effect on the direction of United Amern i.e., United Amern and Netflix go up and down completely randomly.
Pair Corralation between United Amern and Netflix
Given the investment horizon of 90 days United Amern Pete is expected to under-perform the Netflix. In addition to that, United Amern is 4.99 times more volatile than Netflix. It trades about -0.02 of its total potential returns per unit of risk. Netflix is currently generating about 0.46 per unit of volatility. If you would invest 75,944 in Netflix on August 30, 2024 and sell it today you would earn a total of 11,790 from holding Netflix or generate 15.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Amern Pete vs. Netflix
Performance |
| Timeline |
| United Amern Pete |
| Netflix |
United Amern and Netflix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Amern and Netflix
The main advantage of trading using opposite United Amern and Netflix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Amern position performs unexpectedly, Netflix 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 Netflix will offset losses from the drop in Netflix's long position.| United Amern vs. Permian Resources | United Amern vs. Devon Energy | United Amern vs. EOG Resources | United Amern vs. Coterra Energy |
| Netflix vs. Paramount Global Class | Netflix vs. Roku Inc | Netflix vs. Warner Bros Discovery | Netflix vs. AMC Entertainment Holdings |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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