Correlation Between Big 5 and Berkshire Hathaway
Can any of the company-specific risk be diversified away by investing in both Big 5 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 Big 5 and Berkshire Hathaway into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Big 5 Sporting and Berkshire Hathaway, you can compare the effects of market volatilities on Big 5 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 Big 5 with a short position of Berkshire Hathaway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Big 5 and Berkshire Hathaway.
Diversification Opportunities for Big 5 and Berkshire Hathaway
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Big and Berkshire is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Big 5 Sporting and Berkshire Hathaway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berkshire Hathaway and Big 5 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 Big 5 Sporting 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 Big 5 i.e., Big 5 and Berkshire Hathaway go up and down completely randomly.
Pair Corralation between Big 5 and Berkshire Hathaway
If you would invest (100.00) in Berkshire Hathaway on September 13, 2024 and sell it today you would earn a total of 100.00 from holding Berkshire Hathaway or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Big 5 Sporting vs. Berkshire Hathaway
Performance |
| Timeline |
| Big 5 Sporting |
| Berkshire Hathaway |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Big 5 and Berkshire Hathaway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Big 5 and Berkshire Hathaway
The main advantage of trading using opposite Big 5 and Berkshire Hathaway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Big 5 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.| Big 5 vs. Superior Plus Corp | Big 5 vs. SIVERS SEMICONDUCTORS AB | Big 5 vs. NorAm Drilling AS | Big 5 vs. Norsk Hydro ASA |
| Berkshire Hathaway vs. SANOK RUBBER ZY | Berkshire Hathaway vs. Columbia Sportswear | Berkshire Hathaway vs. Big 5 Sporting | Berkshire Hathaway vs. Hyster Yale Materials Handling |
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 Stocks Directory module to find actively traded stocks across global markets.
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