Correlation Between Netflix and Jasmine International

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

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

Diversification Opportunities for Netflix and Jasmine International

-0.43

Correlation Coefficient

Netflix  Jasmine International

Very good diversification

The 3 months correlation between Netflix and Jasmine is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and Jasmine International Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jasmine International 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 Jasmine International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jasmine International has no effect on the direction of Netflix i.e., Netflix and Jasmine International go up and down completely randomly.

Pair Corralation between Netflix and Jasmine International

Given the investment horizon of 90 days Netflix is expected to generate 1.04 times more return on investment than Jasmine International. However, Netflix is 1.04 times more volatile than Jasmine International Public. It trades about 0.04 of its potential returns per unit of risk. Jasmine International Public is currently generating about -0.22 per unit of risk. If you would invest  90,043  in Netflix on December 30, 2024 and sell it today you would earn a total of  3,342  from holding Netflix or generate 3.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Netflix  vs.  Jasmine International Public

Netflix

Risk-Adjusted Performance

Weak

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

Jasmine International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jasmine International Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Netflix and Jasmine International

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

The idea behind Netflix and Jasmine International Public 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.