Correlation Between Berkshire Hathaway and Wesana Health
Can any of the company-specific risk be diversified away by investing in both Berkshire Hathaway and Wesana Health 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 Wesana Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berkshire Hathaway and Wesana Health Holdings, you can compare the effects of market volatilities on Berkshire Hathaway and Wesana Health 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 Wesana Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hathaway and Wesana Health.
Diversification Opportunities for Berkshire Hathaway and Wesana Health
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Berkshire and Wesana is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hathaway and Wesana Health Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wesana Health 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 Wesana Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wesana Health Holdings has no effect on the direction of Berkshire Hathaway i.e., Berkshire Hathaway and Wesana Health go up and down completely randomly.
Pair Corralation between Berkshire Hathaway and Wesana Health
Assuming the 90 days horizon Berkshire Hathaway is expected to generate 7.72 times less return on investment than Wesana Health. But when comparing it to its historical volatility, Berkshire Hathaway is 23.54 times less risky than Wesana Health. It trades about 0.19 of its potential returns per unit of risk. Wesana Health Holdings is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 0.83 in Wesana Health Holdings on August 31, 2024 and sell it today you would lose (0.40) from holding Wesana Health Holdings or give up 48.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Berkshire Hathaway vs. Wesana Health Holdings
Performance |
| Timeline |
| Berkshire Hathaway |
| Wesana Health Holdings |
Berkshire Hathaway and Wesana Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berkshire Hathaway and Wesana Health
The main advantage of trading using opposite Berkshire Hathaway and Wesana Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Hathaway position performs unexpectedly, Wesana Health 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 Wesana Health will offset losses from the drop in Wesana Health'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 |
| Wesana Health vs. Revelation Biosciences | Wesana Health vs. Awakn Life Sciences | Wesana Health vs. HAVN Life Sciences | Wesana Health vs. Silo Pharma |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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