Correlation Between Netflix and Mainstay Tax

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

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

Diversification Opportunities for Netflix and Mainstay Tax

-0.21

Correlation Coefficient

Netflix  Mainstay Tax

Very good diversification

The 3 months correlation between Netflix and Mainstay is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and Mainstay Tax Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Tax Free 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 Mainstay Tax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Tax Free has no effect on the direction of Netflix i.e., Netflix and Mainstay Tax go up and down completely randomly.

Pair Corralation between Netflix and Mainstay Tax

Given the investment horizon of 90 days Netflix is expected to generate 4.73 times more return on investment than Mainstay Tax. However, Netflix is 4.73 times more volatile than Mainstay Tax Free. It trades about 0.58 of its potential returns per unit of risk. Mainstay Tax Free is currently generating about 0.21 per unit of risk. If you would invest  75,551  in Netflix on September 5, 2024 and sell it today you would earn a total of  14,666  from holding Netflix or generate 19.41% return on investment over 90 days.

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

Netflix  vs.  Mainstay Tax Free

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.

Mainstay Tax Free

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Mainstay Tax Free are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental drivers, Mainstay Tax is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Netflix and Mainstay Tax

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

The idea behind Netflix and Mainstay Tax Free 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.