Correlation Between Netflix and Haffner Energy

Can any of the company-specific risk be diversified away by investing in both Netflix and Haffner Energy 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 Haffner Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Netflix and Haffner Energy SA, you can compare the effects of market volatilities on Netflix and Haffner Energy 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 Haffner Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netflix and Haffner Energy.

Diversification Opportunities for Netflix and Haffner Energy

-0.9

Correlation Coefficient

Netflix  Haffner Energy

Pay attention - limited upside

The 3 months correlation between Netflix and Haffner is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and Haffner Energy SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haffner Energy SA 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 Haffner Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haffner Energy SA has no effect on the direction of Netflix i.e., Netflix and Haffner Energy go up and down completely randomly.

Pair Corralation between Netflix and Haffner Energy

Given the investment horizon of 90 days Netflix is expected to generate 0.42 times more return on investment than Haffner Energy. However, Netflix is 2.37 times less risky than Haffner Energy. It trades about 0.24 of its potential returns per unit of risk. Haffner Energy SA is currently generating about -0.14 per unit of risk. If you would invest  68,680  in Netflix on September 12, 2024 and sell it today you would earn a total of  22,655  from holding Netflix or generate 32.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Netflix  vs.  Haffner Energy SA

Netflix

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Netflix are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak essential indicators, Netflix showed solid returns over the last few months and may actually be approaching a breakup point.

Haffner Energy SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Haffner Energy SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Netflix and Haffner Energy

The main advantage of trading using opposite Netflix and Haffner Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netflix position performs unexpectedly, Haffner Energy 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 Haffner Energy will offset losses from the drop in Haffner Energy's long position.

The idea behind Netflix and Haffner Energy SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.