Correlation Between Berkshire Hathaway and Axfood AB
Can any of the company-specific risk be diversified away by investing in both Berkshire Hathaway and Axfood AB 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 Axfood AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berkshire Hathaway and Axfood AB, you can compare the effects of market volatilities on Berkshire Hathaway and Axfood AB 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 Axfood AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hathaway and Axfood AB.
Diversification Opportunities for Berkshire Hathaway and Axfood AB
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Berkshire and Axfood is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hathaway and Axfood AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axfood AB 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 Axfood AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axfood AB has no effect on the direction of Berkshire Hathaway i.e., Berkshire Hathaway and Axfood AB go up and down completely randomly.
Pair Corralation between Berkshire Hathaway and Axfood AB
Assuming the 90 days trading horizon Berkshire Hathaway is expected to generate 1.25 times more return on investment than Axfood AB. However, Berkshire Hathaway is 1.25 times more volatile than Axfood AB. It trades about 0.03 of its potential returns per unit of risk. Axfood AB is currently generating about 0.0 per unit of risk. If you would invest 46,125 in Berkshire Hathaway on November 6, 2024 and sell it today you would earn a total of 950.00 from holding Berkshire Hathaway or generate 2.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.39% |
| Values | Daily Returns |
Berkshire Hathaway vs. Axfood AB
Performance |
| Timeline |
| Berkshire Hathaway |
| Axfood AB |
Berkshire Hathaway and Axfood AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berkshire Hathaway and Axfood AB
The main advantage of trading using opposite Berkshire Hathaway and Axfood AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Hathaway position performs unexpectedly, Axfood AB 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 Axfood AB will offset losses from the drop in Axfood AB'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 |
| Axfood AB vs. Anglo Asian Mining | Axfood AB vs. Coeur Mining | Axfood AB vs. Scandic Hotels Group | Axfood AB vs. McEwen Mining |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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