Correlation Between Berkshire Hathaway and Media
Can any of the company-specific risk be diversified away by investing in both Berkshire Hathaway and Media 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 Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berkshire Hathaway and Media and Games, you can compare the effects of market volatilities on Berkshire Hathaway and Media 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 Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hathaway and Media.
Diversification Opportunities for Berkshire Hathaway and Media
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Berkshire and Media is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hathaway and Media and Games in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Media and Games 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 Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Media and Games has no effect on the direction of Berkshire Hathaway i.e., Berkshire Hathaway and Media go up and down completely randomly.
Pair Corralation between Berkshire Hathaway and Media
Assuming the 90 days horizon Berkshire Hathaway is expected to generate 46.61 times more return on investment than Media. However, Berkshire Hathaway is 46.61 times more volatile than Media and Games. It trades about 0.14 of its potential returns per unit of risk. Media and Games is currently generating about 0.08 per unit of risk. If you would invest 61,050,000 in Berkshire Hathaway on August 30, 2024 and sell it today you would earn a total of 7,500,000 from holding Berkshire Hathaway or generate 12.29% 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. Media and Games
Performance |
| Timeline |
| Berkshire Hathaway |
| Media and Games |
Berkshire Hathaway and Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berkshire Hathaway and Media
The main advantage of trading using opposite Berkshire Hathaway and Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Hathaway position performs unexpectedly, Media 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 Media will offset losses from the drop in Media'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 |
| Media vs. CVR Medical Corp | Media vs. Diamyd Medical AB | Media vs. Geratherm Medical AG | Media vs. SAFETY MEDICAL PROD |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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