Correlation Between Berkshire Hathaway and Powerstorm Holdings
Can any of the company-specific risk be diversified away by investing in both Berkshire Hathaway and Powerstorm Holdings 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 Powerstorm Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berkshire Hathaway and Powerstorm Holdings, you can compare the effects of market volatilities on Berkshire Hathaway and Powerstorm Holdings 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 Powerstorm Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hathaway and Powerstorm Holdings.
Diversification Opportunities for Berkshire Hathaway and Powerstorm Holdings
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Berkshire and Powerstorm is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hathaway and Powerstorm Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Powerstorm Holdings 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 Powerstorm Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Powerstorm Holdings has no effect on the direction of Berkshire Hathaway i.e., Berkshire Hathaway and Powerstorm Holdings go up and down completely randomly.
Pair Corralation between Berkshire Hathaway and Powerstorm Holdings
Assuming the 90 days horizon Berkshire Hathaway is expected to generate 0.16 times more return on investment than Powerstorm Holdings. However, Berkshire Hathaway is 6.44 times less risky than Powerstorm Holdings. It trades about 0.05 of its potential returns per unit of risk. Powerstorm Holdings is currently generating about -0.05 per unit of risk. If you would invest 67,538,000 in Berkshire Hathaway on September 12, 2024 and sell it today you would earn a total of 1,924,000 from holding Berkshire Hathaway or generate 2.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Berkshire Hathaway vs. Powerstorm Holdings
Performance |
| Timeline |
| Berkshire Hathaway |
| Powerstorm Holdings |
Berkshire Hathaway and Powerstorm Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berkshire Hathaway and Powerstorm Holdings
The main advantage of trading using opposite Berkshire Hathaway and Powerstorm Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Hathaway position performs unexpectedly, Powerstorm Holdings 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 Powerstorm Holdings will offset losses from the drop in Powerstorm Holdings' 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 |
| Powerstorm Holdings vs. Solid Power | Powerstorm Holdings vs. Plug Power | Powerstorm Holdings vs. FREYR Battery SA | Powerstorm Holdings vs. FuelCell Energy |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |