Correlation Between Berkshire Hathaway and Public Storage
Can any of the company-specific risk be diversified away by investing in both Berkshire Hathaway and Public Storage 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 Public Storage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berkshire Hathaway and Public Storage, you can compare the effects of market volatilities on Berkshire Hathaway and Public Storage 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 Public Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hathaway and Public Storage.
Diversification Opportunities for Berkshire Hathaway and Public Storage
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Berkshire and Public is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hathaway and Public Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Public Storage 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 Public Storage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Public Storage has no effect on the direction of Berkshire Hathaway i.e., Berkshire Hathaway and Public Storage go up and down completely randomly.
Pair Corralation between Berkshire Hathaway and Public Storage
Assuming the 90 days trading horizon Berkshire Hathaway is expected to generate 1.7 times more return on investment than Public Storage. However, Berkshire Hathaway is 1.7 times more volatile than Public Storage. It trades about 0.1 of its potential returns per unit of risk. Public Storage is currently generating about 0.04 per unit of risk. If you would invest 45,550 in Berkshire Hathaway on November 7, 2024 and sell it today you would earn a total of 1,525 from holding Berkshire Hathaway or generate 3.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Berkshire Hathaway vs. Public Storage
Performance |
| Timeline |
| Berkshire Hathaway |
| Public Storage |
Berkshire Hathaway and Public Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berkshire Hathaway and Public Storage
The main advantage of trading using opposite Berkshire Hathaway and Public Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Hathaway position performs unexpectedly, Public Storage 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 Public Storage will offset losses from the drop in Public Storage's long position.| Berkshire Hathaway vs. Worldwide Healthcare Trust | Berkshire Hathaway vs. UNIQA Insurance Group | Berkshire Hathaway vs. Roebuck Food Group | Berkshire Hathaway vs. Induction Healthcare Group |
| Public Storage vs. Charter Communications Cl | Public Storage vs. Lindsell Train Investment | Public Storage vs. Waste Management | Public Storage vs. Norman Broadbent Plc |
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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