Correlation Between Berkshire Hathaway and Gear Energy
Can any of the company-specific risk be diversified away by investing in both Berkshire Hathaway and Gear Energy 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 Gear Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berkshire Hathaway and Gear Energy, you can compare the effects of market volatilities on Berkshire Hathaway and Gear Energy 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 Gear Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hathaway and Gear Energy.
Diversification Opportunities for Berkshire Hathaway and Gear Energy
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Berkshire and Gear is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hathaway and Gear Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gear Energy 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 Gear Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gear Energy has no effect on the direction of Berkshire Hathaway i.e., Berkshire Hathaway and Gear Energy go up and down completely randomly.
Pair Corralation between Berkshire Hathaway and Gear Energy
Assuming the 90 days horizon Berkshire Hathaway is expected to generate 0.38 times more return on investment than Gear Energy. However, Berkshire Hathaway is 2.66 times less risky than Gear Energy. It trades about 0.09 of its potential returns per unit of risk. Gear Energy is currently generating about -0.04 per unit of risk. If you would invest 54,783,600 in Berkshire Hathaway on September 14, 2024 and sell it today you would earn a total of 13,809,800 from holding Berkshire Hathaway or generate 25.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.26% |
| Values | Daily Returns |
Berkshire Hathaway vs. Gear Energy
Performance |
| Timeline |
| Berkshire Hathaway |
| Gear Energy |
Berkshire Hathaway and Gear Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berkshire Hathaway and Gear Energy
The main advantage of trading using opposite Berkshire Hathaway and Gear Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Hathaway position performs unexpectedly, Gear Energy 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 Gear Energy will offset losses from the drop in Gear Energy'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 |
| Gear Energy vs. POSCO Holdings | Gear Energy vs. Schweizerische Nationalbank | Gear Energy vs. Berkshire Hathaway | Gear Energy vs. Berkshire Hathaway |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |