Correlation Between Netflix and Radico Khaitan
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By analyzing existing cross correlation between Netflix and Radico Khaitan Limited, you can compare the effects of market volatilities on Netflix and Radico Khaitan 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 Radico Khaitan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netflix and Radico Khaitan.
Diversification Opportunities for Netflix and Radico Khaitan
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Netflix and Radico is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and Radico Khaitan Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Radico Khaitan 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 Radico Khaitan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Radico Khaitan has no effect on the direction of Netflix i.e., Netflix and Radico Khaitan go up and down completely randomly.
Pair Corralation between Netflix and Radico Khaitan
Given the investment horizon of 90 days Netflix is expected to generate 0.85 times more return on investment than Radico Khaitan. However, Netflix is 1.18 times less risky than Radico Khaitan. It trades about 0.27 of its potential returns per unit of risk. Radico Khaitan Limited is currently generating about 0.13 per unit of risk. If you would invest 66,577 in Netflix on September 6, 2024 and sell it today you would earn a total of 24,529 from holding Netflix or generate 36.84% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 96.88% |
Values | Daily Returns |
Netflix vs. Radico Khaitan Limited
Performance |
Timeline |
Netflix |
Radico Khaitan |
Netflix and Radico Khaitan Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Netflix and Radico Khaitan
The main advantage of trading using opposite Netflix and Radico Khaitan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netflix position performs unexpectedly, Radico Khaitan 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 Radico Khaitan will offset losses from the drop in Radico Khaitan's 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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