Correlation Between Berkshire Hathaway and Fresenius Medical
Can any of the company-specific risk be diversified away by investing in both Berkshire Hathaway and Fresenius Medical 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 Berkshire Hathaway and Fresenius Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berkshire Hathaway and Fresenius Medical Care, you can compare the effects of market volatilities on Berkshire Hathaway and Fresenius Medical 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 Berkshire Hathaway with a short position of Fresenius Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hathaway and Fresenius Medical.
Diversification Opportunities for Berkshire Hathaway and Fresenius Medical
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Berkshire and Fresenius is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hathaway and Fresenius Medical Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fresenius Medical Care and Berkshire Hathaway 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 Berkshire Hathaway are associated (or correlated) with Fresenius Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fresenius Medical Care has no effect on the direction of Berkshire Hathaway i.e., Berkshire Hathaway and Fresenius Medical go up and down completely randomly.
Pair Corralation between Berkshire Hathaway and Fresenius Medical
Assuming the 90 days trading horizon Berkshire Hathaway is expected to generate 20.49 times less return on investment than Fresenius Medical. But when comparing it to its historical volatility, Berkshire Hathaway is 1.11 times less risky than Fresenius Medical. It trades about 0.01 of its potential returns per unit of risk. Fresenius Medical Care is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 3,899 in Fresenius Medical Care on November 6, 2024 and sell it today you would earn a total of 873.00 from holding Fresenius Medical Care or generate 22.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Berkshire Hathaway vs. Fresenius Medical Care
Performance |
| Timeline |
| Berkshire Hathaway |
| Fresenius Medical Care |
Berkshire Hathaway and Fresenius Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berkshire Hathaway and Fresenius Medical
The main advantage of trading using opposite Berkshire Hathaway and Fresenius Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Hathaway position performs unexpectedly, Fresenius Medical 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 Fresenius Medical will offset losses from the drop in Fresenius Medical's long position.| Berkshire Hathaway vs. Tyson Foods Cl | Berkshire Hathaway vs. Supermarket Income REIT | Berkshire Hathaway vs. Advanced Medical Solutions | Berkshire Hathaway vs. Ecclesiastical Insurance Office |
| Fresenius Medical vs. Eastman Chemical Co | Fresenius Medical vs. Air Products Chemicals | Fresenius Medical vs. Summit Materials Cl | Fresenius Medical vs. Wheaton Precious Metals |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |