Correlation Between Netflix and ENDRA Life

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

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

Diversification Opportunities for Netflix and ENDRA Life

-0.6

Correlation Coefficient

Netflix  ENDRA Life

Excellent diversification

The 3 months correlation between Netflix and ENDRA is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and ENDRA Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENDRA Life Sciences 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 ENDRA Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENDRA Life Sciences has no effect on the direction of Netflix i.e., Netflix and ENDRA Life go up and down completely randomly.

Pair Corralation between Netflix and ENDRA Life

Given the investment horizon of 90 days Netflix is expected to generate 0.14 times more return on investment than ENDRA Life. However, Netflix is 7.01 times less risky than ENDRA Life. It trades about 0.24 of its potential returns per unit of risk. ENDRA Life Sciences is currently generating about -0.01 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	Weak
Accuracy	100.0%
Values	Daily Returns

Netflix  vs.  ENDRA Life Sciences

Netflix

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Netflix are ranked lower than 19 (%) 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.

ENDRA Life Sciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ENDRA Life Sciences has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Netflix and ENDRA Life

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

The idea behind Netflix and ENDRA Life Sciences 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.