Correlation Between Berkshire Hathaway and MERCEDES BENZ
Can any of the company-specific risk be diversified away by investing in both Berkshire Hathaway and MERCEDES BENZ 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 MERCEDES BENZ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berkshire Hathaway and MERCEDES BENZ GRP ADR14, you can compare the effects of market volatilities on Berkshire Hathaway and MERCEDES BENZ 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 MERCEDES BENZ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hathaway and MERCEDES BENZ.
Diversification Opportunities for Berkshire Hathaway and MERCEDES BENZ
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Berkshire and MERCEDES is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hathaway and MERCEDES BENZ GRP ADR14 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MERCEDES BENZ GRP 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 are associated (or correlated) with MERCEDES BENZ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MERCEDES BENZ GRP has no effect on the direction of Berkshire Hathaway i.e., Berkshire Hathaway and MERCEDES BENZ go up and down completely randomly.
Pair Corralation between Berkshire Hathaway and MERCEDES BENZ
Assuming the 90 days trading horizon Berkshire Hathaway is expected to generate 0.47 times more return on investment than MERCEDES BENZ. However, Berkshire Hathaway is 2.12 times less risky than MERCEDES BENZ. It trades about 0.04 of its potential returns per unit of risk. MERCEDES BENZ GRP ADR14 is currently generating about 0.0 per unit of risk. If you would invest 43,170 in Berkshire Hathaway on November 2, 2024 and sell it today you would earn a total of 2,220 from holding Berkshire Hathaway or generate 5.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Berkshire Hathaway vs. MERCEDES BENZ GRP ADR14
Performance |
| Timeline |
| Berkshire Hathaway |
| MERCEDES BENZ GRP |
Berkshire Hathaway and MERCEDES BENZ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berkshire Hathaway and MERCEDES BENZ
The main advantage of trading using opposite Berkshire Hathaway and MERCEDES BENZ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Hathaway position performs unexpectedly, MERCEDES BENZ 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 MERCEDES BENZ will offset losses from the drop in MERCEDES BENZ's long position.| Berkshire Hathaway vs. RCI Hospitality Holdings | Berkshire Hathaway vs. TEN SQUARE GAMES | Berkshire Hathaway vs. BAKED GAMES SA | Berkshire Hathaway vs. National Health Investors |
| MERCEDES BENZ vs. Tesla Inc | MERCEDES BENZ vs. Toyota Motor | MERCEDES BENZ vs. Toyota Motor | MERCEDES BENZ vs. BYD Company Limited |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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