Correlation Between Berkshire Hathaway and Strainsforpains
Can any of the company-specific risk be diversified away by investing in both Berkshire Hathaway and Strainsforpains 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 Strainsforpains into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berkshire Hathaway and Strainsforpains, you can compare the effects of market volatilities on Berkshire Hathaway and Strainsforpains 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 Strainsforpains. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hathaway and Strainsforpains.
Diversification Opportunities for Berkshire Hathaway and Strainsforpains
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Berkshire and Strainsforpains is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hathaway and Strainsforpains in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strainsforpains 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 Strainsforpains. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strainsforpains has no effect on the direction of Berkshire Hathaway i.e., Berkshire Hathaway and Strainsforpains go up and down completely randomly.
Pair Corralation between Berkshire Hathaway and Strainsforpains
Assuming the 90 days horizon Berkshire Hathaway is expected to generate 0.72 times more return on investment than Strainsforpains. However, Berkshire Hathaway is 1.39 times less risky than Strainsforpains. It trades about -0.22 of its potential returns per unit of risk. Strainsforpains is currently generating about -0.22 per unit of risk. If you would invest 70,523,700 in Berkshire Hathaway on October 7, 2024 and sell it today you would lose (2,377,700) from holding Berkshire Hathaway or give up 3.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Berkshire Hathaway vs. Strainsforpains
Performance |
| Timeline |
| Berkshire Hathaway |
| Strainsforpains |
Berkshire Hathaway and Strainsforpains Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berkshire Hathaway and Strainsforpains
The main advantage of trading using opposite Berkshire Hathaway and Strainsforpains positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Hathaway position performs unexpectedly, Strainsforpains 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 Strainsforpains will offset losses from the drop in Strainsforpains' 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 |
| Strainsforpains vs. Petroleo Brasileiro Petrobras | Strainsforpains vs. Equinor ASA ADR | Strainsforpains vs. Eni SpA ADR | Strainsforpains vs. YPF Sociedad Anonima |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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