Correlation Between LIFENET INSURANCE and Berkshire Hathaway
Can any of the company-specific risk be diversified away by investing in both LIFENET INSURANCE 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 LIFENET INSURANCE and Berkshire Hathaway into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LIFENET INSURANCE CO and Berkshire Hathaway, you can compare the effects of market volatilities on LIFENET INSURANCE 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 LIFENET INSURANCE with a short position of Berkshire Hathaway. Check out your portfolio center. Please also check ongoing floating volatility patterns of LIFENET INSURANCE and Berkshire Hathaway.
Diversification Opportunities for LIFENET INSURANCE and Berkshire Hathaway
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between LIFENET and Berkshire is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding LIFENET INSURANCE CO and Berkshire Hathaway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berkshire Hathaway and LIFENET INSURANCE 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 LIFENET INSURANCE CO 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 LIFENET INSURANCE i.e., LIFENET INSURANCE and Berkshire Hathaway go up and down completely randomly.
Pair Corralation between LIFENET INSURANCE and Berkshire Hathaway
Assuming the 90 days horizon LIFENET INSURANCE is expected to generate 14.77 times less return on investment than Berkshire Hathaway. But when comparing it to its historical volatility, LIFENET INSURANCE CO is 20.63 times less risky than Berkshire Hathaway. It trades about 0.08 of its potential returns per unit of risk. Berkshire Hathaway is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 47,400,000 in Berkshire Hathaway on August 31, 2024 and sell it today you would earn a total of 21,150,000 from holding Berkshire Hathaway or generate 44.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.74% |
| Values | Daily Returns |
LIFENET INSURANCE CO vs. Berkshire Hathaway
Performance |
| Timeline |
| LIFENET INSURANCE |
| Berkshire Hathaway |
LIFENET INSURANCE and Berkshire Hathaway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LIFENET INSURANCE and Berkshire Hathaway
The main advantage of trading using opposite LIFENET INSURANCE and Berkshire Hathaway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LIFENET INSURANCE 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.| LIFENET INSURANCE vs. ONWARD MEDICAL BV | LIFENET INSURANCE vs. CHINA TONTINE WINES | LIFENET INSURANCE vs. ITALIAN WINE BRANDS | LIFENET INSURANCE vs. MELIA HOTELS |
| Berkshire Hathaway vs. Berkshire Hathaway | Berkshire Hathaway vs. Zurich Insurance Group | Berkshire Hathaway vs. Sun Life Financial | Berkshire Hathaway vs. Arch Capital Group |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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