Correlation Between Netflix and Calamos Market

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

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

Diversification Opportunities for Netflix and Calamos Market

0.49

Correlation Coefficient

Netflix  Calamos Market

Very weak diversification

The 3 months correlation between Netflix and Calamos is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and Calamos Market Neutral in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calamos Market Neutral 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 Calamos Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calamos Market Neutral has no effect on the direction of Netflix i.e., Netflix and Calamos Market go up and down completely randomly.

Pair Corralation between Netflix and Calamos Market

Given the investment horizon of 90 days Netflix is expected to generate 10.45 times more return on investment than Calamos Market. However, Netflix is 10.45 times more volatile than Calamos Market Neutral. It trades about 0.13 of its potential returns per unit of risk. Calamos Market Neutral is currently generating about 0.12 per unit of risk. If you would invest  29,351  in Netflix on December 2, 2024 and sell it today you would earn a total of  68,705  from holding Netflix or generate 234.08% return on investment over 90 days.

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

Netflix  vs.  Calamos Market Neutral

Netflix

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Netflix are ranked lower than 6 (%) 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 April 2025.

Calamos Market Neutral

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Calamos Market Neutral are ranked lower than 21 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Calamos Market 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 Calamos Market

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

The idea behind Netflix and Calamos Market Neutral 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.