Correlation Between Netflix and Saat Market
Can any of the company-specific risk be diversified away by investing in both Netflix and Saat Market 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 Saat Market into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Netflix and Saat Market Growth, you can compare the effects of market volatilities on Netflix and Saat Market 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 Saat Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netflix and Saat Market.
Diversification Opportunities for Netflix and Saat Market
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Netflix and Saat is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and Saat Market Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saat Market Growth 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 Saat Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saat Market Growth has no effect on the direction of Netflix i.e., Netflix and Saat Market go up and down completely randomly.
Pair Corralation between Netflix and Saat Market
Given the investment horizon of 90 days Netflix is expected to generate 4.97 times more return on investment than Saat Market. However, Netflix is 4.97 times more volatile than Saat Market Growth. It trades about 0.23 of its potential returns per unit of risk. Saat Market Growth is currently generating about 0.18 per unit of risk. If you would invest 68,362 in Netflix on September 5, 2024 and sell it today you would earn a total of 21,855 from holding Netflix or generate 31.97% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Netflix vs. Saat Market Growth
Performance |
Timeline |
Netflix |
Saat Market Growth |
Netflix and Saat Market Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Netflix and Saat Market
The main advantage of trading using opposite Netflix and Saat Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netflix position performs unexpectedly, Saat Market 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 Saat Market will offset losses from the drop in Saat Market's long position.Netflix vs. Paramount Global Class | Netflix vs. Roku Inc | Netflix vs. Warner Bros Discovery | Netflix vs. AMC Entertainment Holdings |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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