Correlation Between Monument Mining and Netflix

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

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

Diversification Opportunities for Monument Mining and Netflix

-0.44

Correlation Coefficient

Monument Mining  Netflix

Very good diversification

The 3 months correlation between Monument and Netflix is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Monument Mining Limited and Netflix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Netflix and Monument Mining 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 Monument Mining Limited 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 Monument Mining i.e., Monument Mining and Netflix go up and down completely randomly.

Pair Corralation between Monument Mining and Netflix

Assuming the 90 days trading horizon Monument Mining Limited is expected to under-perform the Netflix. In addition to that, Monument Mining is 2.48 times more volatile than Netflix. It trades about -0.04 of its total potential returns per unit of risk. Netflix is currently generating about 0.15 per unit of volatility. If you would invest  90,060  in Netflix on April 20, 2025 and sell it today you would earn a total of  13,980  from holding Netflix or generate 15.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Monument Mining Limited  vs.  Netflix

Monument Mining

Risk-Adjusted Performance

Very Weak

Over the last 90 days Monument Mining Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Netflix

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Netflix are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Netflix reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Monument Mining and Netflix

The main advantage of trading using opposite Monument Mining and Netflix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monument Mining 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 Monument Mining Limited 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.