Correlation Between Netflix and Hall Of

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

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

Diversification Opportunities for Netflix and Hall Of

-0.05

Correlation Coefficient

Netflix  Hall Of

Good diversification

The 3 months correlation between Netflix and Hall is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and Hall of Fame in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hall of Fame 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 Hall Of. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hall of Fame has no effect on the direction of Netflix i.e., Netflix and Hall Of go up and down completely randomly.

Pair Corralation between Netflix and Hall Of

Given the investment horizon of 90 days Netflix is expected to generate 0.39 times more return on investment than Hall Of. However, Netflix is 2.55 times less risky than Hall Of. It trades about 0.13 of its potential returns per unit of risk. Hall of Fame is currently generating about -0.06 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 Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Netflix  vs.  Hall of Fame

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.

Hall of Fame

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hall of Fame has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Netflix and Hall Of

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

The idea behind Netflix and Hall of Fame 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.