Correlation Between Berkshire Hathaway and OrganiGram Holdings

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Can any of the company-specific risk be diversified away by investing in both Berkshire Hathaway and OrganiGram Holdings 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 OrganiGram Holdings 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 OrganiGram Holdings, you can compare the effects of market volatilities on Berkshire Hathaway and OrganiGram Holdings 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 OrganiGram Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hathaway and OrganiGram Holdings.

Diversification Opportunities for Berkshire Hathaway and OrganiGram Holdings

BerkshireOrganiGramDiversified AwayBerkshireOrganiGramDiversified Away100%
-0.57
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Berkshire and OrganiGram is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hathaway CDR and OrganiGram Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OrganiGram Holdings 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 OrganiGram Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OrganiGram Holdings has no effect on the direction of Berkshire Hathaway i.e., Berkshire Hathaway and OrganiGram Holdings go up and down completely randomly.

Pair Corralation between Berkshire Hathaway and OrganiGram Holdings

Assuming the 90 days trading horizon Berkshire Hathaway CDR is expected to generate 0.14 times more return on investment than OrganiGram Holdings. However, Berkshire Hathaway CDR is 7.03 times less risky than OrganiGram Holdings. It trades about 0.19 of its potential returns per unit of risk. OrganiGram Holdings is currently generating about -0.15 per unit of risk. If you would invest  3,488  in Berkshire Hathaway CDR on November 25, 2024 and sell it today you would earn a total of  108.00  from holding Berkshire Hathaway CDR or generate 3.1% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Berkshire Hathaway CDR  vs.  OrganiGram Holdings

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -505101520
JavaScript chart by amCharts 3.21.15BRK OGI
       Timeline  
Berkshire Hathaway CDR 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Berkshire Hathaway CDR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Berkshire Hathaway is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb33.53434.53535.53636.537
OrganiGram Holdings 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days OrganiGram Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's forward indicators remain very healthy which may send shares a bit higher in March 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb1.81.922.12.22.32.42.5

Berkshire Hathaway and OrganiGram Holdings Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.92-2.19-1.45-0.720.01230.741.482.222.96 0.10.20.30.4
JavaScript chart by amCharts 3.21.15BRK OGI
       Returns  

Pair Trading with Berkshire Hathaway and OrganiGram Holdings

The main advantage of trading using opposite Berkshire Hathaway and OrganiGram Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Hathaway position performs unexpectedly, OrganiGram Holdings 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 OrganiGram Holdings will offset losses from the drop in OrganiGram Holdings' long position.
The idea behind Berkshire Hathaway CDR and OrganiGram Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.

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