Correlation Between Berkshire Hathaway and Trellus Health
Can any of the company-specific risk be diversified away by investing in both Berkshire Hathaway and Trellus Health 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 Trellus Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berkshire Hathaway and Trellus Health plc, you can compare the effects of market volatilities on Berkshire Hathaway and Trellus Health 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 Trellus Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hathaway and Trellus Health.
Diversification Opportunities for Berkshire Hathaway and Trellus Health
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Berkshire and Trellus is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hathaway and Trellus Health plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trellus Health plc 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 Trellus Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trellus Health plc has no effect on the direction of Berkshire Hathaway i.e., Berkshire Hathaway and Trellus Health go up and down completely randomly.
Pair Corralation between Berkshire Hathaway and Trellus Health
Assuming the 90 days trading horizon Berkshire Hathaway is expected to generate 0.19 times more return on investment than Trellus Health. However, Berkshire Hathaway is 5.14 times less risky than Trellus Health. It trades about 0.07 of its potential returns per unit of risk. Trellus Health plc is currently generating about -0.08 per unit of risk. If you would invest 31,088 in Berkshire Hathaway on October 12, 2024 and sell it today you would earn a total of 13,162 from holding Berkshire Hathaway or generate 42.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Berkshire Hathaway vs. Trellus Health plc
Performance |
| Timeline |
| Berkshire Hathaway |
| Trellus Health plc |
Berkshire Hathaway and Trellus Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berkshire Hathaway and Trellus Health
The main advantage of trading using opposite Berkshire Hathaway and Trellus Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Hathaway position performs unexpectedly, Trellus Health 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 Trellus Health will offset losses from the drop in Trellus Health's long position.| Berkshire Hathaway vs. European Metals Holdings | Berkshire Hathaway vs. Gamma Communications PLC | Berkshire Hathaway vs. Aeorema Communications Plc | Berkshire Hathaway vs. Zegona Communications Plc |
| Trellus Health vs. Berkshire Hathaway | Trellus Health vs. Samsung Electronics Co | Trellus Health vs. Samsung Electronics Co | Trellus Health vs. Chocoladefabriken Lindt Spruengli |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |