Correlation Between Berkshire Hathaway and Pinetree Capital
Can any of the company-specific risk be diversified away by investing in both Berkshire Hathaway and Pinetree Capital 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 Pinetree Capital 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 Pinetree Capital, you can compare the effects of market volatilities on Berkshire Hathaway and Pinetree Capital 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 Pinetree Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hathaway and Pinetree Capital.
Diversification Opportunities for Berkshire Hathaway and Pinetree Capital
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Berkshire and Pinetree is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hathaway CDR and Pinetree Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinetree Capital 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 Pinetree Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinetree Capital has no effect on the direction of Berkshire Hathaway i.e., Berkshire Hathaway and Pinetree Capital go up and down completely randomly.
Pair Corralation between Berkshire Hathaway and Pinetree Capital
Assuming the 90 days trading horizon Berkshire Hathaway CDR is expected to under-perform the Pinetree Capital. But the stock apears to be less risky and, when comparing its historical volatility, Berkshire Hathaway CDR is 6.38 times less risky than Pinetree Capital. The stock trades about -0.07 of its potential returns per unit of risk. The Pinetree Capital is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 935.00 in Pinetree Capital on September 12, 2024 and sell it today you would earn a total of 218.00 from holding Pinetree Capital or generate 23.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Berkshire Hathaway CDR vs. Pinetree Capital
Performance |
| Timeline |
| Berkshire Hathaway CDR |
| Pinetree Capital |
Berkshire Hathaway and Pinetree Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berkshire Hathaway and Pinetree Capital
The main advantage of trading using opposite Berkshire Hathaway and Pinetree Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Hathaway position performs unexpectedly, Pinetree Capital 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 Pinetree Capital will offset losses from the drop in Pinetree Capital's long position.| Berkshire Hathaway vs. Broadcom | Berkshire Hathaway vs. Forsys Metals Corp | Berkshire Hathaway vs. Lion One Metals | Berkshire Hathaway vs. NeXGold Mining Corp |
| Pinetree Capital vs. Laramide Resources | Pinetree Capital vs. Mega Uranium | Pinetree Capital vs. Aston Bay Holdings | Pinetree Capital vs. Ur 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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |