Correlation Between Netflix and HAGA SA

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

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

Diversification Opportunities for Netflix and HAGA SA

0.76

Correlation Coefficient

Netflix  HAGA SA

Poor diversification

The 3 months correlation between Netflix and HAGA is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and HAGA SA Indstria in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HAGA SA Indstria 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 HAGA SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HAGA SA Indstria has no effect on the direction of Netflix i.e., Netflix and HAGA SA go up and down completely randomly.

Pair Corralation between Netflix and HAGA SA

Assuming the 90 days trading horizon Netflix is expected to generate 1.29 times more return on investment than HAGA SA. However, Netflix is 1.29 times more volatile than HAGA SA Indstria. It trades about 0.32 of its potential returns per unit of risk. HAGA SA Indstria is currently generating about 0.05 per unit of risk. If you would invest  7,680  in Netflix on September 4, 2024 and sell it today you would earn a total of  3,260  from holding Netflix or generate 42.45% return on investment over 90 days.

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

Netflix  vs.  HAGA SA Indstria

Netflix

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Netflix are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak essential indicators, Netflix sustained solid returns over the last few months and may actually be approaching a breakup point.

HAGA SA Indstria

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in HAGA SA Indstria are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, HAGA SA 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 HAGA SA

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

The idea behind Netflix and HAGA SA Indstria 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.