Correlation Between Netflix and SVI Public
Can any of the company-specific risk be diversified away by investing in both Netflix and SVI Public 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 SVI Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Netflix and SVI Public, you can compare the effects of market volatilities on Netflix and SVI Public 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 SVI Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netflix and SVI Public.
Diversification Opportunities for Netflix and SVI Public
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Netflix and SVI is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and SVI Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SVI Public 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 SVI Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SVI Public has no effect on the direction of Netflix i.e., Netflix and SVI Public go up and down completely randomly.
Pair Corralation between Netflix and SVI Public
Given the investment horizon of 90 days Netflix is expected to generate 0.88 times more return on investment than SVI Public. However, Netflix is 1.14 times less risky than SVI Public. It trades about 0.08 of its potential returns per unit of risk. SVI Public is currently generating about -0.01 per unit of risk. If you would invest 89,774 in Netflix on December 1, 2024 and sell it today you would earn a total of 8,282 from holding Netflix or generate 9.23% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Netflix vs. SVI Public
Performance |
Timeline |
Netflix |
SVI Public |
Netflix and SVI Public Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Netflix and SVI Public
The main advantage of trading using opposite Netflix and SVI Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netflix position performs unexpectedly, SVI Public 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 SVI Public will offset losses from the drop in SVI Public'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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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