Correlation Between Netflix and Greenhouse Solutions

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

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

Diversification Opportunities for Netflix and Greenhouse Solutions

0.0

Correlation Coefficient

Netflix  Greenhouse Solutions

Pay attention - limited upside

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

Pair Corralation between Netflix and Greenhouse Solutions

If you would invest (100.00) in Greenhouse Solutions on February 1, 2024 and sell it today you would earn a total of  100.00  from holding Greenhouse Solutions or generate -100.0% return on investment over 90 days.

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

Netflix  vs.  Greenhouse Solutions

Netflix

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Netflix has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong essential indicators, Netflix is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Greenhouse Solutions

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Netflix and Greenhouse Solutions

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

The idea behind Netflix and Greenhouse Solutions 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..