Correlation Between Netflix and Klépierre

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

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

Diversification Opportunities for Netflix and Klépierre

0.33

Correlation Coefficient

Netflix  Klépierre

Weak diversification

The 3 months correlation between Netflix and Klépierre is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and Klpierre SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Klpierre SA 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 Klépierre. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Klpierre SA has no effect on the direction of Netflix i.e., Netflix and Klépierre go up and down completely randomly.

Pair Corralation between Netflix and Klépierre

Given the investment horizon of 90 days Netflix is expected to generate 1.49 times less return on investment than Klépierre. In addition to that, Netflix is 2.37 times more volatile than Klpierre SA. It trades about 0.06 of its total potential returns per unit of risk. Klpierre SA is currently generating about 0.22 per unit of volatility. If you would invest  2,700  in Klpierre SA on December 27, 2024 and sell it today you would earn a total of  396.00  from holding Klpierre SA or generate 14.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.83%
Values	Daily Returns

Netflix  vs.  Klpierre SA

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.

Klpierre SA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Klpierre SA are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Klépierre reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Netflix and Klépierre

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

The idea behind Netflix and Klpierre SA 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.