Correlation Between Netflix and Hcm Income

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

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

Diversification Opportunities for Netflix and Hcm Income

0.04

Correlation Coefficient

Netflix  Hcm Income

Significant diversification

The 3 months correlation between Netflix and Hcm is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and Hcm Income Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hcm Income Plus 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 Hcm Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hcm Income Plus has no effect on the direction of Netflix i.e., Netflix and Hcm Income go up and down completely randomly.

Pair Corralation between Netflix and Hcm Income

Given the investment horizon of 90 days Netflix is expected to generate 2.23 times more return on investment than Hcm Income. However, Netflix is 2.23 times more volatile than Hcm Income Plus. It trades about 0.06 of its potential returns per unit of risk. Hcm Income Plus is currently generating about -0.12 per unit of risk. If you would invest  90,755  in Netflix on December 27, 2024 and sell it today you would earn a total of  6,917  from holding Netflix or generate 7.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Netflix  vs.  Hcm Income Plus

Netflix

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Netflix are ranked lower than 4 (%) 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.

Hcm Income Plus

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hcm Income Plus has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Netflix and Hcm Income

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

The idea behind Netflix and Hcm Income Plus 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 CEOs Directory module to screen CEOs from public companies around the world.