Correlation Between Netflix and Janus Henderson

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

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

Diversification Opportunities for Netflix and Janus Henderson

0.37

Correlation Coefficient

Netflix  Janus Henderson

Weak diversification

The 3 months correlation between Netflix and Janus is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and Janus Henderson Mortgage Backe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Henderson Mort 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 Janus Henderson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Janus Henderson Mort has no effect on the direction of Netflix i.e., Netflix and Janus Henderson go up and down completely randomly.

Pair Corralation between Netflix and Janus Henderson

Given the investment horizon of 90 days Netflix is expected to generate 7.37 times more return on investment than Janus Henderson. However, Netflix is 7.37 times more volatile than Janus Henderson Mortgage Backed. It trades about 0.07 of its potential returns per unit of risk. Janus Henderson Mortgage Backed is currently generating about 0.11 per unit of risk. If you would invest  90,043  in Netflix on December 28, 2024 and sell it today you would earn a total of  7,629  from holding Netflix or generate 8.47% return on investment over 90 days.

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

Netflix  vs.  Janus Henderson Mortgage Backe

Netflix

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Netflix are ranked lower than 5 (%) 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.

Janus Henderson Mort

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Janus Henderson Mortgage Backed are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental drivers, Janus Henderson is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Netflix and Janus Henderson

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

The idea behind Netflix and Janus Henderson Mortgage Backed 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.