Correlation Between Netflix and JuneYao Dairy

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

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

Diversification Opportunities for Netflix and JuneYao Dairy

-0.01

Correlation Coefficient

Netflix  JuneYao Dairy

Good diversification

The 3 months correlation between Netflix and JuneYao is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and JuneYao Dairy Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JuneYao Dairy 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 JuneYao Dairy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JuneYao Dairy has no effect on the direction of Netflix i.e., Netflix and JuneYao Dairy go up and down completely randomly.

Pair Corralation between Netflix and JuneYao Dairy

Given the investment horizon of 90 days Netflix is expected to generate 1.0 times more return on investment than JuneYao Dairy. However, Netflix is 1.0 times more volatile than JuneYao Dairy Co. It trades about 0.04 of its potential returns per unit of risk. JuneYao Dairy Co is currently generating about 0.03 per unit of risk. If you would invest  89,132  in Netflix on December 31, 2024 and sell it today you would earn a total of  4,253  from holding Netflix or generate 4.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.08%
Values	Daily Returns

Netflix  vs.  JuneYao Dairy Co

Netflix

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Netflix are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak essential indicators, Netflix may actually be approaching a critical reversion point that can send shares even higher in May 2025.

JuneYao Dairy

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in JuneYao Dairy Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, JuneYao Dairy is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Netflix and JuneYao Dairy

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

The idea behind Netflix and JuneYao Dairy Co 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.