Correlation Between Netflix and OMV AG

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

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

Diversification Opportunities for Netflix and OMV AG

0.43

Correlation Coefficient

Netflix  OMV AG

Very weak diversification

The 3 months correlation between Netflix and OMV is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and OMV AG PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OMV AG PK 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 OMV AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OMV AG PK has no effect on the direction of Netflix i.e., Netflix and OMV AG go up and down completely randomly.

Pair Corralation between Netflix and OMV AG

Given the investment horizon of 90 days Netflix is expected to generate 21.25 times less return on investment than OMV AG. But when comparing it to its historical volatility, Netflix is 1.05 times less risky than OMV AG. It trades about 0.01 of its potential returns per unit of risk. OMV AG PK is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  1,011  in OMV AG PK on December 4, 2024 and sell it today you would earn a total of  88.00  from holding OMV AG PK or generate 8.7% return on investment over 90 days.

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

Netflix  vs.  OMV AG PK

Netflix

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Netflix are ranked lower than 5 (%) 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.

OMV AG PK

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in OMV AG PK are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak forward-looking signals, OMV AG may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Netflix and OMV AG

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

The idea behind Netflix and OMV AG PK 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.