Correlation Between Berkshire Hathaway and Equinox Gold
Can any of the company-specific risk be diversified away by investing in both Berkshire Hathaway and Equinox Gold 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 Equinox Gold 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 Equinox Gold Corp, you can compare the effects of market volatilities on Berkshire Hathaway and Equinox Gold 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 Equinox Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hathaway and Equinox Gold.
Diversification Opportunities for Berkshire Hathaway and Equinox Gold
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Berkshire and Equinox is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hathaway CDR and Equinox Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equinox Gold Corp 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 Equinox Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equinox Gold Corp has no effect on the direction of Berkshire Hathaway i.e., Berkshire Hathaway and Equinox Gold go up and down completely randomly.
Pair Corralation between Berkshire Hathaway and Equinox Gold
Assuming the 90 days trading horizon Berkshire Hathaway CDR is expected to generate 0.39 times more return on investment than Equinox Gold. However, Berkshire Hathaway CDR is 2.53 times less risky than Equinox Gold. It trades about 0.14 of its potential returns per unit of risk. Equinox Gold Corp is currently generating about -0.03 per unit of risk. If you would invest 3,467 in Berkshire Hathaway CDR on August 29, 2024 and sell it today you would earn a total of 148.00 from holding Berkshire Hathaway CDR or generate 4.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Berkshire Hathaway CDR vs. Equinox Gold Corp
Performance |
| Timeline |
| Berkshire Hathaway CDR |
| Equinox Gold Corp |
Berkshire Hathaway and Equinox Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berkshire Hathaway and Equinox Gold
The main advantage of trading using opposite Berkshire Hathaway and Equinox Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Hathaway position performs unexpectedly, Equinox Gold 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 Equinox Gold will offset losses from the drop in Equinox Gold's long position.| Berkshire Hathaway vs. Western Copper and | Berkshire Hathaway vs. Endeavour Silver Corp | Berkshire Hathaway vs. Monument Mining Limited | Berkshire Hathaway vs. Perseus Mining |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |