Correlation Between American Express and Netflix

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both American Express 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 American Express and Netflix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Netflix, you can compare the effects of market volatilities on American Express 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 American Express with a short position of Netflix. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Netflix.

Diversification Opportunities for American Express and Netflix

0.56
  Correlation Coefficient

Very weak diversification

The 3 months correlation between American and Netflix is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Netflix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Netflix and American Express 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 American Express 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 American Express i.e., American Express and Netflix go up and down completely randomly.

Pair Corralation between American Express and Netflix

Considering the 90-day investment horizon American Express is expected to generate 0.59 times more return on investment than Netflix. However, American Express is 1.69 times less risky than Netflix. It trades about 0.0 of its potential returns per unit of risk. Netflix is currently generating about -0.04 per unit of risk. If you would invest  15,465  in American Express on July 9, 2022 and sell it today you would lose (1,608)  from holding American Express or give up 10.4% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

American Express  vs.  Netflix

 Performance (%) 
       Timeline  
American Express 
American Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in American Express are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, American Express is not utilizing all of its potentials. The new stock price disarray, may contribute to short-term losses for the insiders.

American Price Channel

Netflix 
Netflix Performance
12 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Netflix are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal essential indicators, Netflix showed solid returns over the last few months and may actually be approaching a breakup point.

Netflix Price Channel

American Express and Netflix Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with American Express and Netflix

The main advantage of trading using opposite American Express and Netflix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express 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.
American Express vs. Paypal Holdings
The idea behind American Express 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.
Netflix vs. Live Nation Entertainment
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 CEO Directory module to screen CEOs from public companies around the world.

Other Complementary Tools

Portfolio Manager
State of the art Portfolio Manager to monitor and improve performance of your invested capital
Go
Cryptocurrency Center
Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency
Go
Volatility Analysis
Get historical volatility and risk analysis based on latest market data
Go
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Go
Stock Tickers
Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites
Go
Portfolio Rebalancing
Analyze risk-adjusted returns against different time horizons to find asset-allocation targets
Go
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
Go
Portfolio File Import
Quickly import all of your third-party portfolios from your local drive in csv format
Go
Focused Opportunities
Build portfolios using our predefined set of ideas and optimize them against your investing preferences
Go