Correlation Between Geely Automobile and Berkshire Hathaway
Can any of the company-specific risk be diversified away by investing in both Geely Automobile and Berkshire Hathaway 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 Geely Automobile and Berkshire Hathaway into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Geely Automobile Holdings and Berkshire Hathaway, you can compare the effects of market volatilities on Geely Automobile and Berkshire Hathaway 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 Geely Automobile with a short position of Berkshire Hathaway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geely Automobile and Berkshire Hathaway.
Diversification Opportunities for Geely Automobile and Berkshire Hathaway
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Geely and Berkshire is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Geely Automobile Holdings and Berkshire Hathaway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berkshire Hathaway and Geely Automobile 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 Geely Automobile Holdings are associated (or correlated) with Berkshire Hathaway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Berkshire Hathaway has no effect on the direction of Geely Automobile i.e., Geely Automobile and Berkshire Hathaway go up and down completely randomly.
Pair Corralation between Geely Automobile and Berkshire Hathaway
Assuming the 90 days trading horizon Geely Automobile is expected to generate 3.66 times less return on investment than Berkshire Hathaway. In addition to that, Geely Automobile is 2.0 times more volatile than Berkshire Hathaway. It trades about 0.02 of its total potential returns per unit of risk. Berkshire Hathaway is currently generating about 0.12 per unit of volatility. If you would invest 45,300 in Berkshire Hathaway on November 1, 2024 and sell it today you would earn a total of 1,850 from holding Berkshire Hathaway or generate 4.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Geely Automobile Holdings vs. Berkshire Hathaway
Performance |
| Timeline |
| Geely Automobile Holdings |
| Berkshire Hathaway |
Geely Automobile and Berkshire Hathaway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geely Automobile and Berkshire Hathaway
The main advantage of trading using opposite Geely Automobile and Berkshire Hathaway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geely Automobile position performs unexpectedly, Berkshire Hathaway 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 Berkshire Hathaway will offset losses from the drop in Berkshire Hathaway's long position.| Geely Automobile vs. Synthomer plc | Geely Automobile vs. Baker Steel Resources | Geely Automobile vs. Iron Mountain | Geely Automobile vs. Ecclesiastical Insurance Office |
| Berkshire Hathaway vs. Ondine Biomedical | Berkshire Hathaway vs. Invesco Physical Silver | Berkshire Hathaway vs. Thor Mining PLC | Berkshire Hathaway vs. Eastinco Mining Exploration |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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