Correlation Between Netflix and ICL Israel
Can any of the company-specific risk be diversified away by investing in both Netflix and ICL Israel 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 ICL Israel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Netflix and ICL Israel Chemicals, you can compare the effects of market volatilities on Netflix and ICL Israel 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 ICL Israel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netflix and ICL Israel.
Diversification Opportunities for Netflix and ICL Israel
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Netflix and ICL is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and ICL Israel Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICL Israel Chemicals 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 ICL Israel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ICL Israel Chemicals has no effect on the direction of Netflix i.e., Netflix and ICL Israel go up and down completely randomly.
Pair Corralation between Netflix and ICL Israel
Given the investment horizon of 90 days Netflix is expected to generate 2.98 times less return on investment than ICL Israel. But when comparing it to its historical volatility, Netflix is 1.21 times less risky than ICL Israel. It trades about 0.08 of its potential returns per unit of risk. ICL Israel Chemicals is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 456.00 in ICL Israel Chemicals on December 1, 2024 and sell it today you would earn a total of 147.00 from holding ICL Israel Chemicals or generate 32.24% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Netflix vs. ICL Israel Chemicals
Performance |
Timeline |
Netflix |
ICL Israel Chemicals |
Netflix and ICL Israel Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Netflix and ICL Israel
The main advantage of trading using opposite Netflix and ICL Israel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netflix position performs unexpectedly, ICL Israel 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 ICL Israel will offset losses from the drop in ICL Israel's long position.Netflix vs. Paramount Global Class | Netflix vs. Roku Inc | Netflix vs. Warner Bros Discovery | Netflix vs. AMC Entertainment Holdings |
ICL Israel vs. CF Industries Holdings | ICL Israel vs. The Mosaic | ICL Israel vs. American Vanguard | ICL Israel vs. CVR Partners LP |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |