Correlation Between First Majestic and Berkshire Hathaway
Can any of the company-specific risk be diversified away by investing in both First Majestic 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 First Majestic and Berkshire Hathaway into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Majestic Silver and Berkshire Hathaway, you can compare the effects of market volatilities on First Majestic 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 First Majestic with a short position of Berkshire Hathaway. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and Berkshire Hathaway.
Diversification Opportunities for First Majestic and Berkshire Hathaway
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between First and Berkshire is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and Berkshire Hathaway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berkshire Hathaway and First Majestic 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 First Majestic Silver 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 First Majestic i.e., First Majestic and Berkshire Hathaway go up and down completely randomly.
Pair Corralation between First Majestic and Berkshire Hathaway
Assuming the 90 days trading horizon First Majestic Silver is expected to generate 2.47 times more return on investment than Berkshire Hathaway. However, First Majestic is 2.47 times more volatile than Berkshire Hathaway. It trades about 0.05 of its potential returns per unit of risk. Berkshire Hathaway is currently generating about 0.1 per unit of risk. If you would invest 829.00 in First Majestic Silver on November 5, 2024 and sell it today you would earn a total of 22.00 from holding First Majestic Silver or generate 2.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Majestic Silver vs. Berkshire Hathaway
Performance |
| Timeline |
| First Majestic Silver |
| Berkshire Hathaway |
First Majestic and Berkshire Hathaway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Majestic and Berkshire Hathaway
The main advantage of trading using opposite First Majestic and Berkshire Hathaway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic 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.| First Majestic vs. Samsung Electronics Co | First Majestic vs. Samsung Electronics Co | First Majestic vs. Toyota Motor Corp | First Majestic vs. Reliance Industries Ltd |
| Berkshire Hathaway vs. Power Metal Resources | Berkshire Hathaway vs. Jacquet Metal Service | Berkshire Hathaway vs. Vienna Insurance Group | Berkshire Hathaway vs. Home Depot |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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