Correlation Between Netflix and Wharf Real

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

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

Diversification Opportunities for Netflix and Wharf Real

0.0

Correlation Coefficient

Netflix  Wharf Real

Pay attention - limited upside

The 3 months correlation between Netflix and Wharf is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and Wharf Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wharf Real Estate 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 Wharf Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wharf Real Estate has no effect on the direction of Netflix i.e., Netflix and Wharf Real go up and down completely randomly.

Pair Corralation between Netflix and Wharf Real

Given the investment horizon of 90 days Netflix is expected to generate 10.54 times less return on investment than Wharf Real. But when comparing it to its historical volatility, Netflix is 2.6 times less risky than Wharf Real. It trades about 0.03 of its potential returns per unit of risk. Wharf Real Estate is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  238.00  in Wharf Real Estate on December 1, 2024 and sell it today you would earn a total of  22.00  from holding Wharf Real Estate or generate 9.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Netflix  vs.  Wharf Real Estate

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.

Wharf Real Estate

Risk-Adjusted Performance

Very Weak

Over the last 90 days Wharf Real Estate has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Wharf Real is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Netflix and Wharf Real

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

The idea behind Netflix and Wharf Real Estate 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.