Correlation Between Berkshire Hathaway and Diamcor Mining
Can any of the company-specific risk be diversified away by investing in both Berkshire Hathaway and Diamcor Mining 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 Diamcor Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berkshire Hathaway and Diamcor Mining, you can compare the effects of market volatilities on Berkshire Hathaway and Diamcor Mining 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 Diamcor Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hathaway and Diamcor Mining.
Diversification Opportunities for Berkshire Hathaway and Diamcor Mining
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Berkshire and Diamcor is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hathaway and Diamcor Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diamcor Mining 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 Diamcor Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diamcor Mining has no effect on the direction of Berkshire Hathaway i.e., Berkshire Hathaway and Diamcor Mining go up and down completely randomly.
Pair Corralation between Berkshire Hathaway and Diamcor Mining
Assuming the 90 days horizon Berkshire Hathaway is expected to generate 0.12 times more return on investment than Diamcor Mining. However, Berkshire Hathaway is 8.69 times less risky than Diamcor Mining. It trades about 0.11 of its potential returns per unit of risk. Diamcor Mining is currently generating about -0.01 per unit of risk. If you would invest 63,111,000 in Berkshire Hathaway on September 1, 2024 and sell it today you would earn a total of 9,293,000 from holding Berkshire Hathaway or generate 14.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Berkshire Hathaway vs. Diamcor Mining
Performance |
| Timeline |
| Berkshire Hathaway |
| Diamcor Mining |
Berkshire Hathaway and Diamcor Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berkshire Hathaway and Diamcor Mining
The main advantage of trading using opposite Berkshire Hathaway and Diamcor Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Hathaway position performs unexpectedly, Diamcor Mining 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 Diamcor Mining will offset losses from the drop in Diamcor Mining's long position.| Berkshire Hathaway vs. American International Group | Berkshire Hathaway vs. Arch Capital Group | Berkshire Hathaway vs. Sun Life Financial | Berkshire Hathaway vs. Hartford Financial Services |
| Diamcor Mining vs. New Pacific Metals | Diamcor Mining vs. Star Royalties | Diamcor Mining vs. Teuton Resources Corp |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |