Correlation Between Berkshire Hathaway and Superior Plus
Can any of the company-specific risk be diversified away by investing in both Berkshire Hathaway and Superior Plus 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 Superior Plus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berkshire Hathaway and Superior Plus Corp, you can compare the effects of market volatilities on Berkshire Hathaway and Superior Plus 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 Superior Plus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hathaway and Superior Plus.
Diversification Opportunities for Berkshire Hathaway and Superior Plus
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Berkshire and Superior is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hathaway and Superior Plus Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Superior Plus Corp 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 Superior Plus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Superior Plus Corp has no effect on the direction of Berkshire Hathaway i.e., Berkshire Hathaway and Superior Plus go up and down completely randomly.
Pair Corralation between Berkshire Hathaway and Superior Plus
Assuming the 90 days horizon Berkshire Hathaway is expected to generate 0.38 times more return on investment than Superior Plus. However, Berkshire Hathaway is 2.65 times less risky than Superior Plus. It trades about 0.1 of its potential returns per unit of risk. Superior Plus Corp is currently generating about -0.09 per unit of risk. If you would invest 63,950,000 in Berkshire Hathaway on August 25, 2024 and sell it today you would earn a total of 2,500,000 from holding Berkshire Hathaway or generate 3.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Berkshire Hathaway vs. Superior Plus Corp
Performance |
| Timeline |
| Berkshire Hathaway |
| Superior Plus Corp |
Berkshire Hathaway and Superior Plus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berkshire Hathaway and Superior Plus
The main advantage of trading using opposite Berkshire Hathaway and Superior Plus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Hathaway position performs unexpectedly, Superior Plus 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 Superior Plus will offset losses from the drop in Superior Plus' long position.| Berkshire Hathaway vs. Zurich Insurance Group | Berkshire Hathaway vs. Superior Plus Corp | Berkshire Hathaway vs. NMI Holdings | Berkshire Hathaway vs. Origin Agritech |
| Superior Plus vs. Fast Retailing Co | Superior Plus vs. Auto Trader Group | Superior Plus vs. Monster Beverage Corp | Superior Plus vs. Suntory Beverage Food |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |