Correlation Between Netflix and Ultrabull Profund

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

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

Diversification Opportunities for Netflix and Ultrabull Profund

0.82

Correlation Coefficient

Netflix  Ultrabull Profund

Very poor diversification

The 3 months correlation between Netflix and Ultrabull is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and Ultrabull Profund Ultrabull in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ultrabull Profund 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 Ultrabull Profund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ultrabull Profund has no effect on the direction of Netflix i.e., Netflix and Ultrabull Profund go up and down completely randomly.

Pair Corralation between Netflix and Ultrabull Profund

Given the investment horizon of 90 days Netflix is expected to generate 0.98 times more return on investment than Ultrabull Profund. However, Netflix is 1.02 times less risky than Ultrabull Profund. It trades about 0.55 of its potential returns per unit of risk. Ultrabull Profund Ultrabull is currently generating about 0.31 per unit of risk. If you would invest  75,551  in Netflix on September 3, 2024 and sell it today you would earn a total of  13,130  from holding Netflix or generate 17.38% return on investment over 90 days.

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

Netflix  vs.  Ultrabull Profund Ultrabull

Netflix

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Netflix are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak essential indicators, Netflix showed solid returns over the last few months and may actually be approaching a breakup point.

Ultrabull Profund

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ultrabull Profund Ultrabull are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Ultrabull Profund showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Netflix and Ultrabull Profund

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

The idea behind Netflix and Ultrabull Profund Ultrabull 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.

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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..