Correlation Between Berkshire Hathaway and United Community
Can any of the company-specific risk be diversified away by investing in both Berkshire Hathaway and United Community 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 United Community into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berkshire Hathaway and United Community Banks, you can compare the effects of market volatilities on Berkshire Hathaway and United Community 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 United Community. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hathaway and United Community.
Diversification Opportunities for Berkshire Hathaway and United Community
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Berkshire and United is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hathaway and United Community Banks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Community Banks 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 United Community. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Community Banks has no effect on the direction of Berkshire Hathaway i.e., Berkshire Hathaway and United Community go up and down completely randomly.
Pair Corralation between Berkshire Hathaway and United Community
If you would invest 36,110 in Berkshire Hathaway on November 9, 2024 and sell it today you would earn a total of 11,612 from holding Berkshire Hathaway or generate 32.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Berkshire Hathaway vs. United Community Banks
Performance |
| Timeline |
| Berkshire Hathaway |
| United Community Banks |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Berkshire Hathaway and United Community Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berkshire Hathaway and United Community
The main advantage of trading using opposite Berkshire Hathaway and United Community positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Hathaway position performs unexpectedly, United Community 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 United Community will offset losses from the drop in United Community'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 |
| United Community vs. Pinnacle Financial Partners | United Community vs. Wintrust Financial Corp | United Community vs. Heartland Financial USA | United Community vs. OceanFirst Financial 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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