Correlation Between Berkshire Hathaway and BANK HANDLOWY
Can any of the company-specific risk be diversified away by investing in both Berkshire Hathaway and BANK HANDLOWY 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 BANK HANDLOWY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berkshire Hathaway and BANK HANDLOWY, you can compare the effects of market volatilities on Berkshire Hathaway and BANK HANDLOWY 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 BANK HANDLOWY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hathaway and BANK HANDLOWY.
Diversification Opportunities for Berkshire Hathaway and BANK HANDLOWY
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Berkshire and BANK is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hathaway and BANK HANDLOWY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK HANDLOWY 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 BANK HANDLOWY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANK HANDLOWY has no effect on the direction of Berkshire Hathaway i.e., Berkshire Hathaway and BANK HANDLOWY go up and down completely randomly.
Pair Corralation between Berkshire Hathaway and BANK HANDLOWY
Assuming the 90 days horizon Berkshire Hathaway is expected to generate 493.38 times more return on investment than BANK HANDLOWY. However, Berkshire Hathaway is 493.38 times more volatile than BANK HANDLOWY. It trades about 0.21 of its potential returns per unit of risk. BANK HANDLOWY is currently generating about -0.36 per unit of risk. If you would invest 60,650,000 in Berkshire Hathaway on September 4, 2024 and sell it today you would earn a total of 7,850,000 from holding Berkshire Hathaway or generate 12.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Berkshire Hathaway vs. BANK HANDLOWY
Performance |
| Timeline |
| Berkshire Hathaway |
| BANK HANDLOWY |
Berkshire Hathaway and BANK HANDLOWY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berkshire Hathaway and BANK HANDLOWY
The main advantage of trading using opposite Berkshire Hathaway and BANK HANDLOWY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Hathaway position performs unexpectedly, BANK HANDLOWY 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 BANK HANDLOWY will offset losses from the drop in BANK HANDLOWY's long position.| Berkshire Hathaway vs. Berkshire Hathaway | Berkshire Hathaway vs. Superior Plus Corp | Berkshire Hathaway vs. NMI Holdings | Berkshire Hathaway vs. Origin Agritech |
| BANK HANDLOWY vs. LION ONE METALS | BANK HANDLOWY vs. Gamma Communications plc | BANK HANDLOWY vs. Computer And Technologies | BANK HANDLOWY vs. COMPUTERSHARE |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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