Correlation Between Berkshire Hathaway and Zinzino AB
Can any of the company-specific risk be diversified away by investing in both Berkshire Hathaway and Zinzino AB 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 Zinzino AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berkshire Hathaway and Zinzino AB, you can compare the effects of market volatilities on Berkshire Hathaway and Zinzino AB 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 Zinzino AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hathaway and Zinzino AB.
Diversification Opportunities for Berkshire Hathaway and Zinzino AB
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Berkshire and Zinzino is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hathaway and Zinzino AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zinzino AB 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 Zinzino AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zinzino AB has no effect on the direction of Berkshire Hathaway i.e., Berkshire Hathaway and Zinzino AB go up and down completely randomly.
Pair Corralation between Berkshire Hathaway and Zinzino AB
Assuming the 90 days horizon Berkshire Hathaway is expected to generate 2.8 times less return on investment than Zinzino AB. But when comparing it to its historical volatility, Berkshire Hathaway is 3.62 times less risky than Zinzino AB. It trades about 0.33 of its potential returns per unit of risk. Zinzino AB is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 1,020 in Zinzino AB on December 1, 2024 and sell it today you would earn a total of 280.00 from holding Zinzino AB or generate 27.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Berkshire Hathaway vs. Zinzino AB
Performance |
| Timeline |
| Berkshire Hathaway |
| Zinzino AB |
Berkshire Hathaway and Zinzino AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berkshire Hathaway and Zinzino AB
The main advantage of trading using opposite Berkshire Hathaway and Zinzino AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Hathaway position performs unexpectedly, Zinzino AB 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 Zinzino AB will offset losses from the drop in Zinzino AB'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 |
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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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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