Correlation Between Berkshire Hathaway and Pfizer
Can any of the company-specific risk be diversified away by investing in both Berkshire Hathaway and Pfizer 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 Pfizer 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 Pfizer Inc CDR, you can compare the effects of market volatilities on Berkshire Hathaway and Pfizer 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 Pfizer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hathaway and Pfizer.
Diversification Opportunities for Berkshire Hathaway and Pfizer
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Berkshire and Pfizer is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hathaway CDR and Pfizer Inc CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pfizer Inc CDR 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 Pfizer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pfizer Inc CDR has no effect on the direction of Berkshire Hathaway i.e., Berkshire Hathaway and Pfizer go up and down completely randomly.
Pair Corralation between Berkshire Hathaway and Pfizer
Assuming the 90 days trading horizon Berkshire Hathaway CDR is expected to generate 0.78 times more return on investment than Pfizer. However, Berkshire Hathaway CDR is 1.27 times less risky than Pfizer. It trades about 0.0 of its potential returns per unit of risk. Pfizer Inc CDR is currently generating about -0.08 per unit of risk. If you would invest 3,467 in Berkshire Hathaway CDR on October 26, 2024 and sell it today you would lose (4.00) from holding Berkshire Hathaway CDR or give up 0.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Berkshire Hathaway CDR vs. Pfizer Inc CDR
Performance |
| Timeline |
| Berkshire Hathaway CDR |
| Pfizer Inc CDR |
Berkshire Hathaway and Pfizer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berkshire Hathaway and Pfizer
The main advantage of trading using opposite Berkshire Hathaway and Pfizer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Hathaway position performs unexpectedly, Pfizer 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 Pfizer will offset losses from the drop in Pfizer's long position.| Berkshire Hathaway vs. US Financial 15 | Berkshire Hathaway vs. Venzee Technologies | Berkshire Hathaway vs. First National Financial | Berkshire Hathaway vs. Dominion Lending Centres |
| Pfizer vs. Canlan Ice Sports | Pfizer vs. Broadcom | Pfizer vs. TGS Esports | Pfizer vs. Storage Vault Canada |
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.
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