Correlation Between Berkshire Hathaway and Strattner Financial
Can any of the company-specific risk be diversified away by investing in both Berkshire Hathaway and Strattner Financial 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 Strattner Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berkshire Hathaway and Strattner Financial Group, you can compare the effects of market volatilities on Berkshire Hathaway and Strattner Financial 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 Strattner Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hathaway and Strattner Financial.
Diversification Opportunities for Berkshire Hathaway and Strattner Financial
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Berkshire and Strattner is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hathaway and Strattner Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strattner Financial 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 Strattner Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strattner Financial has no effect on the direction of Berkshire Hathaway i.e., Berkshire Hathaway and Strattner Financial go up and down completely randomly.
Pair Corralation between Berkshire Hathaway and Strattner Financial
Assuming the 90 days horizon Berkshire Hathaway is expected to generate 72.28 times less return on investment than Strattner Financial. But when comparing it to its historical volatility, Berkshire Hathaway is 86.81 times less risky than Strattner Financial. It trades about 0.1 of its potential returns per unit of risk. Strattner Financial Group is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 0.02 in Strattner Financial Group on September 13, 2024 and sell it today you would earn a total of 0.00 from holding Strattner Financial Group or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Berkshire Hathaway vs. Strattner Financial Group
Performance |
| Timeline |
| Berkshire Hathaway |
| Strattner Financial |
Berkshire Hathaway and Strattner Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berkshire Hathaway and Strattner Financial
The main advantage of trading using opposite Berkshire Hathaway and Strattner Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Hathaway position performs unexpectedly, Strattner Financial 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 Strattner Financial will offset losses from the drop in Strattner Financial's long position.| Berkshire Hathaway vs. American International Group | Berkshire Hathaway vs. Sun Life Financial | Berkshire Hathaway vs. Arch Capital Group | Berkshire Hathaway vs. Hartford Financial Services |
| Strattner Financial vs. Dorchester Minerals LP | Strattner Financial vs. 88 Energy Limited | Strattner Financial vs. Hess Corporation | Strattner Financial vs. Antero Resources Corp |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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