Correlation Between Berkshire Hathaway and Manulife Financial
Can any of the company-specific risk be diversified away by investing in both Berkshire Hathaway and Manulife Financial 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 Manulife Financial 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 Manulife Financial Corp, you can compare the effects of market volatilities on Berkshire Hathaway and Manulife Financial 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 Manulife Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hathaway and Manulife Financial.
Diversification Opportunities for Berkshire Hathaway and Manulife Financial
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Berkshire and Manulife is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hathaway CDR and Manulife Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manulife Financial 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 Manulife Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manulife Financial Corp has no effect on the direction of Berkshire Hathaway i.e., Berkshire Hathaway and Manulife Financial go up and down completely randomly.
Pair Corralation between Berkshire Hathaway and Manulife Financial
Assuming the 90 days trading horizon Berkshire Hathaway CDR is expected to generate 1.9 times more return on investment than Manulife Financial. However, Berkshire Hathaway is 1.9 times more volatile than Manulife Financial Corp. It trades about 0.23 of its potential returns per unit of risk. Manulife Financial Corp is currently generating about -0.12 per unit of risk. If you would invest 3,406 in Berkshire Hathaway CDR on September 1, 2024 and sell it today you would earn a total of 249.00 from holding Berkshire Hathaway CDR or generate 7.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Berkshire Hathaway CDR vs. Manulife Financial Corp
Performance |
| Timeline |
| Berkshire Hathaway CDR |
| Manulife Financial Corp |
Berkshire Hathaway and Manulife Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berkshire Hathaway and Manulife Financial
The main advantage of trading using opposite Berkshire Hathaway and Manulife Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Hathaway position performs unexpectedly, Manulife Financial 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 Manulife Financial will offset losses from the drop in Manulife Financial's long position.| Berkshire Hathaway vs. Amazon CDR | Berkshire Hathaway vs. Apple Inc CDR | Berkshire Hathaway vs. Alphabet Inc CDR | Berkshire Hathaway vs. Walmart Inc CDR |
| Manulife Financial vs. Fairfax Financial Holdings | Manulife Financial vs. iShares Canadian HYBrid | Manulife Financial vs. Brompton European Dividend | Manulife Financial vs. Solar Alliance Energy |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |