Correlation Between Netflix and Expat Romania

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

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

Diversification Opportunities for Netflix and Expat Romania

-0.74

Correlation Coefficient

Netflix  Expat Romania

Pay attention - limited upside

The 3 months correlation between Netflix and Expat is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and Expat Romania BET in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Expat Romania BET 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 Expat Romania. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Expat Romania BET has no effect on the direction of Netflix i.e., Netflix and Expat Romania go up and down completely randomly.

Pair Corralation between Netflix and Expat Romania

Given the investment horizon of 90 days Netflix is expected to generate 2.29 times more return on investment than Expat Romania. However, Netflix is 2.29 times more volatile than Expat Romania BET. It trades about 0.23 of its potential returns per unit of risk. Expat Romania BET is currently generating about -0.17 per unit of risk. If you would invest  67,968  in Netflix on September 4, 2024 and sell it today you would earn a total of  21,806  from holding Netflix or generate 32.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.46%
Values	Daily Returns

Netflix  vs.  Expat Romania BET

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.

Expat Romania BET

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Expat Romania BET has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Etf's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the exchange-traded fund private investors.

Pair Trading with Netflix and Expat Romania

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

The idea behind Netflix and Expat Romania BET 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.

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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.