Correlation Between Chocoladefabriken and Berkshire Hathaway
Can any of the company-specific risk be diversified away by investing in both Chocoladefabriken and Berkshire Hathaway 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 Chocoladefabriken and Berkshire Hathaway into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chocoladefabriken Lindt Spruengli and Berkshire Hathaway, you can compare the effects of market volatilities on Chocoladefabriken and Berkshire Hathaway 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 Chocoladefabriken with a short position of Berkshire Hathaway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chocoladefabriken and Berkshire Hathaway.
Diversification Opportunities for Chocoladefabriken and Berkshire Hathaway
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chocoladefabriken and Berkshire is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Chocoladefabriken Lindt Spruen and Berkshire Hathaway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berkshire Hathaway and Chocoladefabriken 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 Chocoladefabriken Lindt Spruengli are associated (or correlated) with Berkshire Hathaway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Berkshire Hathaway has no effect on the direction of Chocoladefabriken i.e., Chocoladefabriken and Berkshire Hathaway go up and down completely randomly.
Pair Corralation between Chocoladefabriken and Berkshire Hathaway
Assuming the 90 days trading horizon Chocoladefabriken Lindt Spruengli is expected to under-perform the Berkshire Hathaway. But the stock apears to be less risky and, when comparing its historical volatility, Chocoladefabriken Lindt Spruengli is 1.33 times less risky than Berkshire Hathaway. The stock trades about -0.02 of its potential returns per unit of risk. The Berkshire Hathaway is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 45,500 in Berkshire Hathaway on September 1, 2024 and sell it today you would earn a total of 2,950 from holding Berkshire Hathaway or generate 6.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chocoladefabriken Lindt Spruen vs. Berkshire Hathaway
Performance |
| Timeline |
| Chocoladefabriken Lindt |
| Berkshire Hathaway |
Chocoladefabriken and Berkshire Hathaway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chocoladefabriken and Berkshire Hathaway
The main advantage of trading using opposite Chocoladefabriken and Berkshire Hathaway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chocoladefabriken position performs unexpectedly, Berkshire Hathaway 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 Berkshire Hathaway will offset losses from the drop in Berkshire Hathaway's long position.| Chocoladefabriken vs. GoldMining | Chocoladefabriken vs. Live Nation Entertainment | Chocoladefabriken vs. Air Products Chemicals | Chocoladefabriken vs. McEwen Mining |
| Berkshire Hathaway vs. McEwen Mining | Berkshire Hathaway vs. Allianz Technology Trust | Berkshire Hathaway vs. Cornish Metals | Berkshire Hathaway vs. Sunny Optical Technology |
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 the Stocks Directory module to find actively traded stocks across global markets.
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