Correlation Between Netflix and Valneva SE

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

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

Diversification Opportunities for Netflix and Valneva SE

0.8

Correlation Coefficient

Netflix  Valneva SE

Very poor diversification

The 3 months correlation between Netflix and Valneva is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and Valneva SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valneva SE 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 Valneva SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valneva SE has no effect on the direction of Netflix i.e., Netflix and Valneva SE go up and down completely randomly.

Pair Corralation between Netflix and Valneva SE

Given the investment horizon of 90 days Netflix is expected to generate 0.48 times more return on investment than Valneva SE. However, Netflix is 2.08 times less risky than Valneva SE. It trades about 0.13 of its potential returns per unit of risk. Valneva SE is currently generating about 0.0 per unit of risk. If you would invest  29,351  in Netflix on December 2, 2024 and sell it today you would earn a total of  68,705  from holding Netflix or generate 234.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.8%
Values	Daily Returns

Netflix  vs.  Valneva SE

Netflix

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Netflix are ranked lower than 6 (%) 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.

Valneva SE

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Valneva SE are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, Valneva SE demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Netflix and Valneva SE

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

The idea behind Netflix and Valneva SE 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.