Correlation Between Netflix and Land Securities
Can any of the company-specific risk be diversified away by investing in both Netflix and Land Securities 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 Land Securities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Netflix and Land Securities Group, you can compare the effects of market volatilities on Netflix and Land Securities 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 Land Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netflix and Land Securities.
Diversification Opportunities for Netflix and Land Securities
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Netflix and Land is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and Land Securities Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Land Securities Group 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 Land Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Land Securities Group has no effect on the direction of Netflix i.e., Netflix and Land Securities go up and down completely randomly.
Pair Corralation between Netflix and Land Securities
Given the investment horizon of 90 days Netflix is expected to generate 1.02 times more return on investment than Land Securities. However, Netflix is 1.02 times more volatile than Land Securities Group. It trades about 0.08 of its potential returns per unit of risk. Land Securities Group is currently generating about -0.01 per unit of risk. If you would invest 89,774 in Netflix on December 1, 2024 and sell it today you would earn a total of 8,282 from holding Netflix or generate 9.23% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 75.0% |
Values | Daily Returns |
Netflix vs. Land Securities Group
Performance |
Timeline |
Netflix |
Land Securities Group |
Netflix and Land Securities Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Netflix and Land Securities
The main advantage of trading using opposite Netflix and Land Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netflix position performs unexpectedly, Land Securities 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 Land Securities will offset losses from the drop in Land Securities' long position.Netflix vs. Paramount Global Class | Netflix vs. Roku Inc | Netflix vs. Warner Bros Discovery | Netflix vs. AMC Entertainment Holdings |
Land Securities vs. Land Securities Group | Land Securities vs. British Land | Land Securities vs. Taylor Wimpey PLC | Land Securities vs. Klpierre SA |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
Equity Valuation Check real value of public entities based on technical and fundamental data | |
Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |