Correlation Between Cheer Holding and Netflix

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

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

Diversification Opportunities for Cheer Holding and Netflix

-0.05

Correlation Coefficient

Cheer Holding  Netflix

Good diversification

The 3 months correlation between Cheer and Netflix is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Cheer Holding and Netflix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Netflix and Cheer 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 Cheer Holding 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 Cheer Holding i.e., Cheer Holding and Netflix go up and down completely randomly.

Pair Corralation between Cheer Holding and Netflix

Considering the 90-day investment horizon Cheer Holding is expected to generate 2.9 times more return on investment than Netflix. However, Cheer Holding is 2.9 times more volatile than Netflix. It trades about 0.14 of its potential returns per unit of risk. Netflix is currently generating about 0.03 per unit of risk. If you would invest  131.00  in Cheer Holding on May 4, 2025 and sell it today you would earn a total of  53.00  from holding Cheer Holding or generate 40.46% return on investment over 90 days.

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

Cheer Holding  vs.  Netflix

Cheer Holding

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cheer Holding are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal technical indicators, Cheer Holding reported solid returns over the last few months and may actually be approaching a breakup point.

Netflix

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Netflix are ranked lower than 2 (%) 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 Cheer Holding and Netflix

The main advantage of trading using opposite Cheer Holding and Netflix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheer 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 Cheer Holding 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.