Correlation Between Netflix and SMA Solar
Can any of the company-specific risk be diversified away by investing in both Netflix and SMA Solar 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 SMA Solar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Netflix and SMA Solar Technology, you can compare the effects of market volatilities on Netflix and SMA Solar 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 SMA Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netflix and SMA Solar.
Diversification Opportunities for Netflix and SMA Solar
Very good diversification
The 3 months correlation between Netflix and SMA is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and SMA Solar Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SMA Solar Technology 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 SMA Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SMA Solar Technology has no effect on the direction of Netflix i.e., Netflix and SMA Solar go up and down completely randomly.
Pair Corralation between Netflix and SMA Solar
Given the investment horizon of 90 days Netflix is expected to generate 0.46 times more return on investment than SMA Solar. However, Netflix is 2.19 times less risky than SMA Solar. It trades about 0.06 of its potential returns per unit of risk. SMA Solar Technology is currently generating about 0.0 per unit of risk. If you would invest 91,787 in Netflix on December 5, 2024 and sell it today you would earn a total of 5,471 from holding Netflix or generate 5.96% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 71.19% |
Values | Daily Returns |
Netflix vs. SMA Solar Technology
Performance |
Timeline |
Netflix |
SMA Solar Technology |
Netflix and SMA Solar Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Netflix and SMA Solar
The main advantage of trading using opposite Netflix and SMA Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netflix position performs unexpectedly, SMA Solar 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 SMA Solar will offset losses from the drop in SMA Solar's long position.Netflix vs. Paramount Global Class | Netflix vs. Roku Inc | Netflix vs. Warner Bros Discovery | Netflix vs. AMC Entertainment Holdings |
SMA Solar vs. Xinyi Solar Holdings | SMA Solar vs. Xinyi Solar Holdings | SMA Solar vs. Sunrun Inc | SMA Solar vs. SMA Solar Technology |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
Bonds Directory Find actively traded corporate debentures issued by US companies | |
Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
Fundamental Analysis View fundamental data based on most recent published financial statements |