Correlation Between Berkshire Hathaway and Spanish Mountain
Can any of the company-specific risk be diversified away by investing in both Berkshire Hathaway and Spanish Mountain 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 Spanish Mountain 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 Spanish Mountain Gold, you can compare the effects of market volatilities on Berkshire Hathaway and Spanish Mountain 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 Spanish Mountain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hathaway and Spanish Mountain.
Diversification Opportunities for Berkshire Hathaway and Spanish Mountain
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Berkshire and Spanish is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hathaway CDR and Spanish Mountain Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spanish Mountain Gold 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 Spanish Mountain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spanish Mountain Gold has no effect on the direction of Berkshire Hathaway i.e., Berkshire Hathaway and Spanish Mountain go up and down completely randomly.
Pair Corralation between Berkshire Hathaway and Spanish Mountain
Assuming the 90 days trading horizon Berkshire Hathaway CDR is expected to generate 0.21 times more return on investment than Spanish Mountain. However, Berkshire Hathaway CDR is 4.8 times less risky than Spanish Mountain. It trades about 0.13 of its potential returns per unit of risk. Spanish Mountain Gold is currently generating about -0.01 per unit of risk. If you would invest 2,703 in Berkshire Hathaway CDR on September 3, 2024 and sell it today you would earn a total of 905.00 from holding Berkshire Hathaway CDR or generate 33.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Berkshire Hathaway CDR vs. Spanish Mountain Gold
Performance |
| Timeline |
| Berkshire Hathaway CDR |
| Spanish Mountain Gold |
Berkshire Hathaway and Spanish Mountain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berkshire Hathaway and Spanish Mountain
The main advantage of trading using opposite Berkshire Hathaway and Spanish Mountain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Hathaway position performs unexpectedly, Spanish Mountain 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 Spanish Mountain will offset losses from the drop in Spanish Mountain's long position.| Berkshire Hathaway vs. Converge Technology Solutions | Berkshire Hathaway vs. Constellation Software | Berkshire Hathaway vs. Questor Technology | Berkshire Hathaway vs. Osisko Metals |
| Spanish Mountain vs. Strikepoint Gold | Spanish Mountain vs. Kore Mining | Spanish Mountain vs. Unigold | Spanish Mountain vs. Kootenay Silver |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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