Correlation Between Berkshire Hathaway and Kodiak Copper
Can any of the company-specific risk be diversified away by investing in both Berkshire Hathaway and Kodiak Copper 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 Kodiak Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berkshire Hathaway and Kodiak Copper Corp, you can compare the effects of market volatilities on Berkshire Hathaway and Kodiak Copper 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 Kodiak Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hathaway and Kodiak Copper.
Diversification Opportunities for Berkshire Hathaway and Kodiak Copper
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Berkshire and Kodiak is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hathaway and Kodiak Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kodiak Copper 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 Kodiak Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kodiak Copper Corp has no effect on the direction of Berkshire Hathaway i.e., Berkshire Hathaway and Kodiak Copper go up and down completely randomly.
Pair Corralation between Berkshire Hathaway and Kodiak Copper
Assuming the 90 days horizon Berkshire Hathaway is expected to generate 0.22 times more return on investment than Kodiak Copper. However, Berkshire Hathaway is 4.52 times less risky than Kodiak Copper. It trades about 0.12 of its potential returns per unit of risk. Kodiak Copper Corp is currently generating about -0.04 per unit of risk. If you would invest 54,590,000 in Berkshire Hathaway on August 26, 2024 and sell it today you would earn a total of 16,838,000 from holding Berkshire Hathaway or generate 30.84% 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. Kodiak Copper Corp
Performance |
| Timeline |
| Berkshire Hathaway |
| Kodiak Copper Corp |
Berkshire Hathaway and Kodiak Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berkshire Hathaway and Kodiak Copper
The main advantage of trading using opposite Berkshire Hathaway and Kodiak Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Hathaway position performs unexpectedly, Kodiak Copper 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 Kodiak Copper will offset losses from the drop in Kodiak Copper'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 |
| Kodiak Copper vs. Morningstar Unconstrained Allocation | Kodiak Copper vs. High Yield Municipal Fund | Kodiak Copper vs. Knife River | Kodiak Copper vs. Klckner Co SE |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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