Correlation Between Berkshire Hathaway and Live Nation
Can any of the company-specific risk be diversified away by investing in both Berkshire Hathaway and Live Nation 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 Hathaway and Live Nation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berkshire Hathaway and Live Nation Entertainment, you can compare the effects of market volatilities on Berkshire Hathaway and Live Nation 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 Hathaway with a short position of Live Nation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hathaway and Live Nation.
Diversification Opportunities for Berkshire Hathaway and Live Nation
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Berkshire and Live is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hathaway and Live Nation Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Live Nation Entertainment and Berkshire Hathaway 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 Hathaway are associated (or correlated) with Live Nation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Live Nation Entertainment has no effect on the direction of Berkshire Hathaway i.e., Berkshire Hathaway and Live Nation go up and down completely randomly.
Pair Corralation between Berkshire Hathaway and Live Nation
Assuming the 90 days horizon Berkshire Hathaway is expected to generate 74.87 times more return on investment than Live Nation. However, Berkshire Hathaway is 74.87 times more volatile than Live Nation Entertainment. It trades about 0.2 of its potential returns per unit of risk. Live Nation Entertainment is currently generating about 0.36 per unit of risk. If you would invest 63,350,000 in Berkshire Hathaway on August 30, 2024 and sell it today you would earn a total of 5,200,000 from holding Berkshire Hathaway or generate 8.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Berkshire Hathaway vs. Live Nation Entertainment
Performance |
| Timeline |
| Berkshire Hathaway |
| Live Nation Entertainment |
Berkshire Hathaway and Live Nation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berkshire Hathaway and Live Nation
The main advantage of trading using opposite Berkshire Hathaway and Live Nation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Hathaway position performs unexpectedly, Live Nation 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 Nation will offset losses from the drop in Live Nation's long position.| Berkshire Hathaway vs. XLMedia PLC | Berkshire Hathaway vs. Nordic Semiconductor ASA | Berkshire Hathaway vs. REMEDY ENTERTAINMENT OYJ | Berkshire Hathaway vs. ZINC MEDIA GR |
| Live Nation vs. Superior Plus Corp | Live Nation vs. NMI Holdings | Live Nation vs. SIVERS SEMICONDUCTORS AB | Live Nation vs. Talanx AG |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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