Correlation Between Netflix and Pinnacle Foods
Can any of the company-specific risk be diversified away by investing in both Netflix and Pinnacle Foods 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 Pinnacle Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Netflix and Pinnacle Foods, you can compare the effects of market volatilities on Netflix and Pinnacle Foods 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 Pinnacle Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netflix and Pinnacle Foods.
Diversification Opportunities for Netflix and Pinnacle Foods
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Netflix and Pinnacle is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and Pinnacle Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinnacle Foods 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 Pinnacle Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinnacle Foods has no effect on the direction of Netflix i.e., Netflix and Pinnacle Foods go up and down completely randomly.
Pair Corralation between Netflix and Pinnacle Foods
If you would invest 90,043 in Netflix on December 28, 2024 and sell it today you would earn a total of 3,342 from holding Netflix or generate 3.71% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
Netflix vs. Pinnacle Foods
Performance |
Timeline |
Netflix |
Pinnacle Foods |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Netflix and Pinnacle Foods Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Netflix and Pinnacle Foods
The main advantage of trading using opposite Netflix and Pinnacle Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netflix position performs unexpectedly, Pinnacle Foods 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 Pinnacle Foods will offset losses from the drop in Pinnacle Foods' long position.Netflix vs. Paramount Global Class | Netflix vs. Roku Inc | Netflix vs. Warner Bros Discovery | Netflix vs. AMC Entertainment Holdings |
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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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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