Correlation Between Netflix and Mackenzie Floating

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

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

Diversification Opportunities for Netflix and Mackenzie Floating

0.72

Correlation Coefficient

Netflix  Mackenzie Floating

Poor diversification

The 3 months correlation between Netflix and Mackenzie is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and Mackenzie Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mackenzie Floating Rate 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 Mackenzie Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mackenzie Floating Rate has no effect on the direction of Netflix i.e., Netflix and Mackenzie Floating go up and down completely randomly.

Pair Corralation between Netflix and Mackenzie Floating

Given the investment horizon of 90 days Netflix is expected to generate 7.73 times more return on investment than Mackenzie Floating. However, Netflix is 7.73 times more volatile than Mackenzie Floating Rate. It trades about 0.11 of its potential returns per unit of risk. Mackenzie Floating Rate is currently generating about 0.11 per unit of risk. If you would invest  31,783  in Netflix on September 4, 2024 and sell it today you would earn a total of  58,434  from holding Netflix or generate 183.85% return on investment over 90 days.

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

Netflix  vs.  Mackenzie Floating Rate

Netflix

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Netflix are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak essential indicators, Netflix showed solid returns over the last few months and may actually be approaching a breakup point.

Mackenzie Floating Rate

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mackenzie Floating Rate are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Mackenzie Floating is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Netflix and Mackenzie Floating

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

The idea behind Netflix and Mackenzie Floating Rate 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.