Correlation Between Origin Agritech and Berkshire Hathaway
Can any of the company-specific risk be diversified away by investing in both Origin Agritech 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 Origin Agritech and Berkshire Hathaway into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and Berkshire Hathaway, you can compare the effects of market volatilities on Origin Agritech 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 Origin Agritech with a short position of Berkshire Hathaway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and Berkshire Hathaway.
Diversification Opportunities for Origin Agritech and Berkshire Hathaway
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Origin and Berkshire is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and Berkshire Hathaway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berkshire Hathaway and Origin Agritech 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 Origin Agritech 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 Origin Agritech i.e., Origin Agritech and Berkshire Hathaway go up and down completely randomly.
Pair Corralation between Origin Agritech and Berkshire Hathaway
Assuming the 90 days trading horizon Origin Agritech is expected to under-perform the Berkshire Hathaway. In addition to that, Origin Agritech is 5.41 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 0.07 per unit of volatility. If you would invest 44,900,000 in Berkshire Hathaway on August 25, 2024 and sell it today you would earn a total of 21,550,000 from holding Berkshire Hathaway or generate 48.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Origin Agritech vs. Berkshire Hathaway
Performance |
| Timeline |
| Origin Agritech |
| Berkshire Hathaway |
Origin Agritech and Berkshire Hathaway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and Berkshire Hathaway
The main advantage of trading using opposite Origin Agritech and Berkshire Hathaway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech 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.| Origin Agritech vs. Mizuho Financial Group | Origin Agritech vs. Mitsui Chemicals | Origin Agritech vs. PT Bank Maybank | Origin Agritech vs. REVO INSURANCE SPA |
| Berkshire Hathaway vs. Zurich Insurance Group | Berkshire Hathaway vs. Superior Plus Corp | Berkshire Hathaway vs. NMI Holdings | Berkshire Hathaway vs. Origin Agritech |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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