Correlation Between Berkshire Hathaway and Therma Bright
Can any of the company-specific risk be diversified away by investing in both Berkshire Hathaway and Therma Bright 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 Therma Bright 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 Therma Bright, you can compare the effects of market volatilities on Berkshire Hathaway and Therma Bright 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 Therma Bright. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hathaway and Therma Bright.
Diversification Opportunities for Berkshire Hathaway and Therma Bright
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Berkshire and Therma is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hathaway CDR and Therma Bright in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Therma Bright 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 Therma Bright. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Therma Bright has no effect on the direction of Berkshire Hathaway i.e., Berkshire Hathaway and Therma Bright go up and down completely randomly.
Pair Corralation between Berkshire Hathaway and Therma Bright
Assuming the 90 days trading horizon Berkshire Hathaway CDR is expected to generate 0.12 times more return on investment than Therma Bright. However, Berkshire Hathaway CDR is 8.37 times less risky than Therma Bright. It trades about -0.02 of its potential returns per unit of risk. Therma Bright is currently generating about -0.11 per unit of risk. If you would invest 3,627 in Berkshire Hathaway CDR on September 4, 2024 and sell it today you would lose (74.00) from holding Berkshire Hathaway CDR or give up 2.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Berkshire Hathaway CDR vs. Therma Bright
Performance |
| Timeline |
| Berkshire Hathaway CDR |
| Therma Bright |
Berkshire Hathaway and Therma Bright Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berkshire Hathaway and Therma Bright
The main advantage of trading using opposite Berkshire Hathaway and Therma Bright positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Hathaway position performs unexpectedly, Therma Bright 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 Therma Bright will offset losses from the drop in Therma Bright's long position.| Berkshire Hathaway vs. Lycos Energy | Berkshire Hathaway vs. Scandium Canada | Berkshire Hathaway vs. Voice Mobility International | Berkshire Hathaway vs. Martina Minerals Corp |
| Therma Bright vs. Walmart Inc CDR | Therma Bright vs. Amazon CDR | Therma Bright vs. Berkshire Hathaway CDR | Therma Bright vs. UnitedHealth Group CDR |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |