Correlation Between Berkshire Focus and Live Oak
Can any of the company-specific risk be diversified away by investing in both Berkshire Focus and Live Oak 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 Focus and Live Oak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berkshire Focus and Live Oak Health, you can compare the effects of market volatilities on Berkshire Focus and Live Oak 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 Focus with a short position of Live Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Focus and Live Oak.
Diversification Opportunities for Berkshire Focus and Live Oak
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Berkshire and Live is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Focus and Live Oak Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Live Oak Health and Berkshire Focus 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 Focus are associated (or correlated) with Live Oak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Live Oak Health has no effect on the direction of Berkshire Focus i.e., Berkshire Focus and Live Oak go up and down completely randomly.
Pair Corralation between Berkshire Focus and Live Oak
Assuming the 90 days horizon Berkshire Focus is expected to generate 2.77 times more return on investment than Live Oak. However, Berkshire Focus is 2.77 times more volatile than Live Oak Health. It trades about 0.16 of its potential returns per unit of risk. Live Oak Health is currently generating about -0.04 per unit of risk. If you would invest 2,572 in Berkshire Focus on November 2, 2024 and sell it today you would earn a total of 645.00 from holding Berkshire Focus or generate 25.08% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Berkshire Focus vs. Live Oak Health
Performance |
Timeline |
Berkshire Focus |
Live Oak Health |
Berkshire Focus and Live Oak Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Berkshire Focus and Live Oak
The main advantage of trading using opposite Berkshire Focus and Live Oak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Focus position performs unexpectedly, Live Oak 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 Live Oak will offset losses from the drop in Live Oak's long position.Berkshire Focus vs. Red Oak Technology | Berkshire Focus vs. Firsthand Technology Opportunities | Berkshire Focus vs. Morgan Stanley Multi | Berkshire Focus vs. Internet Ultrasector Profund |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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