Correlation Between Berkshire Hathaway and Wizz Air
Can any of the company-specific risk be diversified away by investing in both Berkshire Hathaway and Wizz Air 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 Wizz Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berkshire Hathaway and Wizz Air Holdings, you can compare the effects of market volatilities on Berkshire Hathaway and Wizz Air 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 Wizz Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hathaway and Wizz Air.
Diversification Opportunities for Berkshire Hathaway and Wizz Air
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Berkshire and Wizz is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hathaway and Wizz Air Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wizz Air 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 Wizz Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wizz Air Holdings has no effect on the direction of Berkshire Hathaway i.e., Berkshire Hathaway and Wizz Air go up and down completely randomly.
Pair Corralation between Berkshire Hathaway and Wizz Air
Assuming the 90 days trading horizon Berkshire Hathaway is expected to generate 0.36 times more return on investment than Wizz Air. However, Berkshire Hathaway is 2.81 times less risky than Wizz Air. It trades about 0.25 of its potential returns per unit of risk. Wizz Air Holdings is currently generating about -0.07 per unit of risk. If you would invest 45,350 in Berkshire Hathaway on September 2, 2024 and sell it today you would earn a total of 3,100 from holding Berkshire Hathaway or generate 6.84% 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. Wizz Air Holdings
Performance |
| Timeline |
| Berkshire Hathaway |
| Wizz Air Holdings |
Berkshire Hathaway and Wizz Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berkshire Hathaway and Wizz Air
The main advantage of trading using opposite Berkshire Hathaway and Wizz Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Hathaway position performs unexpectedly, Wizz Air 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 Wizz Air will offset losses from the drop in Wizz Air's long position.| Berkshire Hathaway vs. Zegona Communications Plc | Berkshire Hathaway vs. Oakley Capital Investments | Berkshire Hathaway vs. Aberdeen Diversified Income | Berkshire Hathaway vs. Monks Investment Trust |
| Wizz Air vs. Blackrock World Mining | Wizz Air vs. Various Eateries PLC | Wizz Air vs. Sparebank 1 SR | Wizz Air vs. Beowulf 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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