Correlation Between Berkshire Hathaway and Geely Automobile
Can any of the company-specific risk be diversified away by investing in both Berkshire Hathaway and Geely Automobile 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 Geely Automobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berkshire Hathaway and Geely Automobile Holdings, you can compare the effects of market volatilities on Berkshire Hathaway and Geely Automobile 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 Geely Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hathaway and Geely Automobile.
Diversification Opportunities for Berkshire Hathaway and Geely Automobile
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Berkshire and Geely is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hathaway and Geely Automobile Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geely Automobile Holdings 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 Geely Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Geely Automobile Holdings has no effect on the direction of Berkshire Hathaway i.e., Berkshire Hathaway and Geely Automobile go up and down completely randomly.
Pair Corralation between Berkshire Hathaway and Geely Automobile
Assuming the 90 days trading horizon Berkshire Hathaway is expected to generate 29.86 times less return on investment than Geely Automobile. But when comparing it to its historical volatility, Berkshire Hathaway is 23.44 times less risky than Geely Automobile. It trades about 0.09 of its potential returns per unit of risk. Geely Automobile Holdings is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,161 in Geely Automobile Holdings on November 8, 2024 and sell it today you would earn a total of 339.00 from holding Geely Automobile Holdings or generate 29.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.59% |
| Values | Daily Returns |
Berkshire Hathaway vs. Geely Automobile Holdings
Performance |
| Timeline |
| Berkshire Hathaway |
| Geely Automobile Holdings |
Berkshire Hathaway and Geely Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berkshire Hathaway and Geely Automobile
The main advantage of trading using opposite Berkshire Hathaway and Geely Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Hathaway position performs unexpectedly, Geely Automobile 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 Geely Automobile will offset losses from the drop in Geely Automobile'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 |
| Geely Automobile vs. Target Healthcare REIT | Geely Automobile vs. Ebro Foods | Geely Automobile vs. Omega Healthcare Investors | Geely Automobile vs. Premier Foods 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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