Correlation Between Berkshire Hathaway and HLS Therapeutics
Can any of the company-specific risk be diversified away by investing in both Berkshire Hathaway and HLS Therapeutics 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 HLS Therapeutics 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 HLS Therapeutics, you can compare the effects of market volatilities on Berkshire Hathaway and HLS Therapeutics 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 HLS Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hathaway and HLS Therapeutics.
Diversification Opportunities for Berkshire Hathaway and HLS Therapeutics
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Berkshire and HLS is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hathaway CDR and HLS Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HLS Therapeutics 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 HLS Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HLS Therapeutics has no effect on the direction of Berkshire Hathaway i.e., Berkshire Hathaway and HLS Therapeutics go up and down completely randomly.
Pair Corralation between Berkshire Hathaway and HLS Therapeutics
Assuming the 90 days trading horizon Berkshire Hathaway CDR is expected to generate 0.27 times more return on investment than HLS Therapeutics. However, Berkshire Hathaway CDR is 3.71 times less risky than HLS Therapeutics. It trades about 0.09 of its potential returns per unit of risk. HLS Therapeutics is currently generating about -0.03 per unit of risk. If you would invest 2,405 in Berkshire Hathaway CDR on November 5, 2024 and sell it today you would earn a total of 1,120 from holding Berkshire Hathaway CDR or generate 46.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Berkshire Hathaway CDR vs. HLS Therapeutics
Performance |
| Timeline |
| Berkshire Hathaway CDR |
| HLS Therapeutics |
Berkshire Hathaway and HLS Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berkshire Hathaway and HLS Therapeutics
The main advantage of trading using opposite Berkshire Hathaway and HLS Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Hathaway position performs unexpectedly, HLS Therapeutics 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 HLS Therapeutics will offset losses from the drop in HLS Therapeutics' long position.| Berkshire Hathaway vs. Marimaca Copper Corp | Berkshire Hathaway vs. Mako Mining Corp | Berkshire Hathaway vs. InPlay Oil Corp | Berkshire Hathaway vs. Diamond Estates Wines |
| HLS Therapeutics vs. Profound Medical Corp | HLS Therapeutics vs. Medicenna Therapeutics Corp | HLS Therapeutics vs. Knight Therapeutics | HLS Therapeutics vs. Aptose Biosciences |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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