Correlation Between Berkshire Hathaway and Cogeco Communications
Can any of the company-specific risk be diversified away by investing in both Berkshire Hathaway and Cogeco Communications 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 Cogeco Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berkshire Hathaway CDR and Cogeco Communications, you can compare the effects of market volatilities on Berkshire Hathaway and Cogeco Communications 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 Cogeco Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hathaway and Cogeco Communications.
Diversification Opportunities for Berkshire Hathaway and Cogeco Communications
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Berkshire and Cogeco is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hathaway CDR and Cogeco Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cogeco Communications 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 CDR are associated (or correlated) with Cogeco Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cogeco Communications has no effect on the direction of Berkshire Hathaway i.e., Berkshire Hathaway and Cogeco Communications go up and down completely randomly.
Pair Corralation between Berkshire Hathaway and Cogeco Communications
Assuming the 90 days trading horizon Berkshire Hathaway CDR is expected to under-perform the Cogeco Communications. But the stock apears to be less risky and, when comparing its historical volatility, Berkshire Hathaway CDR is 2.02 times less risky than Cogeco Communications. The stock trades about -0.06 of its potential returns per unit of risk. The Cogeco Communications is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 7,068 in Cogeco Communications on September 13, 2024 and sell it today you would earn a total of 17.00 from holding Cogeco Communications or generate 0.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Berkshire Hathaway CDR vs. Cogeco Communications
Performance |
| Timeline |
| Berkshire Hathaway CDR |
| Cogeco Communications |
Berkshire Hathaway and Cogeco Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berkshire Hathaway and Cogeco Communications
The main advantage of trading using opposite Berkshire Hathaway and Cogeco Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Hathaway position performs unexpectedly, Cogeco Communications 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 Cogeco Communications will offset losses from the drop in Cogeco Communications' long position.| Berkshire Hathaway vs. Goodfood Market Corp | Berkshire Hathaway vs. Northstar Clean Technologies | Berkshire Hathaway vs. Ocumetics Technology Corp | Berkshire Hathaway vs. Medical Facilities |
| Cogeco Communications vs. UPS CDR | Cogeco Communications vs. HOME DEPOT CDR | Cogeco Communications vs. UnitedHealth Group CDR | Cogeco Communications vs. Costco Wholesale 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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