Correlation Between Netflix and MGO Global

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

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

Diversification Opportunities for Netflix and MGO Global

-0.58

Correlation Coefficient

Netflix  MGO Global

Excellent diversification

The 3 months correlation between Netflix and MGO is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and MGO Global Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MGO Global Common 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 MGO Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MGO Global Common has no effect on the direction of Netflix i.e., Netflix and MGO Global go up and down completely randomly.

Pair Corralation between Netflix and MGO Global

Given the investment horizon of 90 days Netflix is expected to generate 2.22 times less return on investment than MGO Global. But when comparing it to its historical volatility, Netflix is 13.62 times less risky than MGO Global. It trades about 0.15 of its potential returns per unit of risk. MGO Global Common is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  680.00  in MGO Global Common on October 5, 2024 and sell it today you would lose (613.33) from holding MGO Global Common or give up 90.2% of portfolio value over 90 days.

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

Netflix  vs.  MGO Global Common

Netflix

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Netflix are ranked lower than 15 (%) 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.

MGO Global Common

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MGO Global Common has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Netflix and MGO Global

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

The idea behind Netflix and MGO Global Common 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.