Correlation Between Netflix and VIB Vermgen

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

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

Diversification Opportunities for Netflix and VIB Vermgen

-0.51

Correlation Coefficient

Netflix  VIB Vermgen

Excellent diversification

The 3 months correlation between Netflix and VIB is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and VIB Vermgen AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VIB Vermgen AG 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 VIB Vermgen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VIB Vermgen AG has no effect on the direction of Netflix i.e., Netflix and VIB Vermgen go up and down completely randomly.

Pair Corralation between Netflix and VIB Vermgen

Given the investment horizon of 90 days Netflix is expected to generate 1.62 times more return on investment than VIB Vermgen. However, Netflix is 1.62 times more volatile than VIB Vermgen AG. It trades about 0.07 of its potential returns per unit of risk. VIB Vermgen AG is currently generating about -0.03 per unit of risk. If you would invest  90,043  in Netflix on December 29, 2024 and sell it today you would earn a total of  7,629  from holding Netflix or generate 8.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	96.83%
Values	Daily Returns

Netflix  vs.  VIB Vermgen AG

Netflix

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Netflix are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak essential indicators, Netflix may actually be approaching a critical reversion point that can send shares even higher in April 2025.

VIB Vermgen AG

Risk-Adjusted Performance

Very Weak

Over the last 90 days VIB Vermgen AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, VIB Vermgen is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Netflix and VIB Vermgen

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

The idea behind Netflix and VIB Vermgen AG 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.

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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.