Correlation Between World Wrestling and Netflix

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

By analyzing existing cross correlation between World Wrestling Entertainment and Netflix, you can compare the effects of market volatilities on World Wrestling and Netflix 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 World Wrestling with a short position of Netflix. Check out your portfolio center. Please also check ongoing floating volatility patterns of World Wrestling and Netflix.

Diversification Opportunities for World Wrestling and Netflix

0.0

Correlation Coefficient

World Wrestling  Netflix

Pay attention - limited upside

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

Pair Corralation between World Wrestling and Netflix

If you would invest  97,724  in Netflix on December 27, 2024 and sell it today you would lose (52.00) from holding Netflix or give up 0.05% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

World Wrestling Entertainment  vs.  Netflix

World Wrestling Ente

Risk-Adjusted Performance

Very Weak

Over the last 90 days World Wrestling Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, World Wrestling is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Netflix

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Netflix are ranked lower than 4 (%) 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.

Pair Trading with World Wrestling and Netflix

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

The idea behind World Wrestling Entertainment and Netflix 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.