Correlation Between Netflix and IShares Preferred

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

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

Diversification Opportunities for Netflix and IShares Preferred

0.39

Correlation Coefficient

Netflix  IShares Preferred

Weak diversification

The 3 months correlation between Netflix and IShares is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and iShares Preferred and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Preferred 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 IShares Preferred. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Preferred has no effect on the direction of Netflix i.e., Netflix and IShares Preferred go up and down completely randomly.

Pair Corralation between Netflix and IShares Preferred

Given the investment horizon of 90 days Netflix is expected to generate 2.56 times less return on investment than IShares Preferred. In addition to that, Netflix is 3.79 times more volatile than iShares Preferred and. It trades about 0.02 of its total potential returns per unit of risk. iShares Preferred and is currently generating about 0.21 per unit of volatility. If you would invest  2,964  in iShares Preferred and on May 7, 2025 and sell it today you would earn a total of  161.00  from holding iShares Preferred and or generate 5.43% return on investment over 90 days.

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

Netflix  vs.  iShares Preferred and

Netflix

Risk-Adjusted Performance

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.

iShares Preferred

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Preferred and are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, IShares Preferred is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Netflix and IShares Preferred

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

The idea behind Netflix and iShares Preferred and 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.