Correlation Between Berkshire Hathaway and Western Copper
Can any of the company-specific risk be diversified away by investing in both Berkshire Hathaway and Western Copper 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 Western Copper 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 Western Copper and, you can compare the effects of market volatilities on Berkshire Hathaway and Western Copper 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 Western Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hathaway and Western Copper.
Diversification Opportunities for Berkshire Hathaway and Western Copper
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Berkshire and Western is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hathaway CDR and Western Copper and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Copper 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 Western Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Copper has no effect on the direction of Berkshire Hathaway i.e., Berkshire Hathaway and Western Copper go up and down completely randomly.
Pair Corralation between Berkshire Hathaway and Western Copper
Assuming the 90 days trading horizon Berkshire Hathaway CDR is expected to generate 0.4 times more return on investment than Western Copper. However, Berkshire Hathaway CDR is 2.53 times less risky than Western Copper. It trades about 0.13 of its potential returns per unit of risk. Western Copper and is currently generating about 0.02 per unit of risk. If you would invest 3,467 in Berkshire Hathaway CDR on August 28, 2024 and sell it today you would earn a total of 139.00 from holding Berkshire Hathaway CDR or generate 4.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Berkshire Hathaway CDR vs. Western Copper and
Performance |
| Timeline |
| Berkshire Hathaway CDR |
| Western Copper |
Berkshire Hathaway and Western Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berkshire Hathaway and Western Copper
The main advantage of trading using opposite Berkshire Hathaway and Western Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Hathaway position performs unexpectedly, Western Copper 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 Western Copper will offset losses from the drop in Western Copper's long position.| Berkshire Hathaway vs. Western Copper and | Berkshire Hathaway vs. Endeavour Silver Corp | Berkshire Hathaway vs. Monument Mining Limited | Berkshire Hathaway vs. Perseus Mining |
| Western Copper vs. First Majestic Silver | Western Copper vs. Ivanhoe Energy | Western Copper vs. Orezone Gold Corp | Western Copper vs. Faraday Copper Corp |
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
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |