Correlation Between Scienjoy Holding and Netflix

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

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

Diversification Opportunities for Scienjoy Holding and Netflix

-0.1

Correlation Coefficient

Scienjoy Holding  Netflix

Good diversification

The 3 months correlation between Scienjoy and Netflix is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Scienjoy Holding Corp and Netflix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Netflix and Scienjoy Holding 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 Scienjoy Holding Corp 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 Scienjoy Holding i.e., Scienjoy Holding and Netflix go up and down completely randomly.

Pair Corralation between Scienjoy Holding and Netflix

Allowing for the 90-day total investment horizon Scienjoy Holding Corp is expected to under-perform the Netflix. In addition to that, Scienjoy Holding is 2.2 times more volatile than Netflix. It trades about -0.17 of its total potential returns per unit of risk. Netflix is currently generating about -0.16 per unit of volatility. If you would invest  63,008  in Netflix on February 3, 2024 and sell it today you would lose (6,493) from holding Netflix or give up 10.31% of portfolio value over 90 days.

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

Scienjoy Holding Corp  vs.  Netflix

Scienjoy Holding Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Scienjoy Holding Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's forward-looking indicators remain steady and the new chaos on Wall Street may also be a sign of medium-term gains for the company stakeholders.

Netflix

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Netflix are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong essential indicators, Netflix is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Scienjoy Holding and Netflix

The main advantage of trading using opposite Scienjoy Holding and Netflix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scienjoy Holding 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 Scienjoy Holding Corp 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.

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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.