Correlation Between Berkshire Hathaway and NEXTERA
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By analyzing existing cross correlation between Berkshire Hathaway and NEXTERA ENERGY CAPITAL, you can compare the effects of market volatilities on Berkshire Hathaway and NEXTERA 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 NEXTERA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hathaway and NEXTERA.
Diversification Opportunities for Berkshire Hathaway and NEXTERA
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Berkshire and NEXTERA is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hathaway and NEXTERA ENERGY CAPITAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEXTERA ENERGY CAPITAL 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 NEXTERA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEXTERA ENERGY CAPITAL has no effect on the direction of Berkshire Hathaway i.e., Berkshire Hathaway and NEXTERA go up and down completely randomly.
Pair Corralation between Berkshire Hathaway and NEXTERA
Assuming the 90 days horizon Berkshire Hathaway is expected to generate 2.09 times more return on investment than NEXTERA. However, Berkshire Hathaway is 2.09 times more volatile than NEXTERA ENERGY CAPITAL. It trades about 0.13 of its potential returns per unit of risk. NEXTERA ENERGY CAPITAL is currently generating about -0.34 per unit of risk. If you would invest 45,849 in Berkshire Hathaway on August 27, 2024 and sell it today you would earn a total of 1,808 from holding Berkshire Hathaway or generate 3.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Berkshire Hathaway vs. NEXTERA ENERGY CAPITAL
Performance |
| Timeline |
| Berkshire Hathaway |
| NEXTERA ENERGY CAPITAL |
Berkshire Hathaway and NEXTERA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berkshire Hathaway and NEXTERA
The main advantage of trading using opposite Berkshire Hathaway and NEXTERA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Hathaway position performs unexpectedly, NEXTERA 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 NEXTERA will offset losses from the drop in NEXTERA'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 |
| NEXTERA vs. Mativ Holdings | NEXTERA vs. Coupang LLC | NEXTERA vs. Simon Property Group | NEXTERA vs. HNI 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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