Correlation Between Aston Martin and Berkshire Hathaway
Can any of the company-specific risk be diversified away by investing in both Aston Martin 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 Aston Martin and Berkshire Hathaway into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aston Martin Lagonda and Berkshire Hathaway, you can compare the effects of market volatilities on Aston Martin 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 Aston Martin with a short position of Berkshire Hathaway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aston Martin and Berkshire Hathaway.
Diversification Opportunities for Aston Martin and Berkshire Hathaway
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Aston and Berkshire is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Aston Martin Lagonda and Berkshire Hathaway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berkshire Hathaway and Aston Martin 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 Aston Martin Lagonda 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 Aston Martin i.e., Aston Martin and Berkshire Hathaway go up and down completely randomly.
Pair Corralation between Aston Martin and Berkshire Hathaway
If you would invest 45,475 in Berkshire Hathaway on November 2, 2024 and sell it today you would earn a total of 1,725 from holding Berkshire Hathaway or generate 3.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Aston Martin Lagonda vs. Berkshire Hathaway
Performance |
| Timeline |
| Aston Martin Lagonda |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Berkshire Hathaway |
Aston Martin and Berkshire Hathaway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aston Martin and Berkshire Hathaway
The main advantage of trading using opposite Aston Martin and Berkshire Hathaway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aston Martin 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.| Aston Martin vs. Endeavour Mining Corp | Aston Martin vs. Hochschild Mining plc | Aston Martin vs. Beazer Homes USA | Aston Martin vs. Blackrock World Mining |
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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