Correlation Between Berkshire Hathaway and FuelCell Energy
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By analyzing existing cross correlation between Berkshire Hathaway and FuelCell Energy, you can compare the effects of market volatilities on Berkshire Hathaway and FuelCell Energy 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 FuelCell Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hathaway and FuelCell Energy.
Diversification Opportunities for Berkshire Hathaway and FuelCell Energy
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Berkshire and FuelCell is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hathaway and FuelCell Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FuelCell Energy 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 FuelCell Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FuelCell Energy has no effect on the direction of Berkshire Hathaway i.e., Berkshire Hathaway and FuelCell Energy go up and down completely randomly.
Pair Corralation between Berkshire Hathaway and FuelCell Energy
Assuming the 90 days trading horizon Berkshire Hathaway is expected to generate 0.09 times more return on investment than FuelCell Energy. However, Berkshire Hathaway is 10.85 times less risky than FuelCell Energy. It trades about -0.35 of its potential returns per unit of risk. FuelCell Energy is currently generating about -0.05 per unit of risk. If you would invest 45,870 in Berkshire Hathaway on September 24, 2024 and sell it today you would lose (2,170) from holding Berkshire Hathaway or give up 4.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Berkshire Hathaway vs. FuelCell Energy
Performance |
| Timeline |
| Berkshire Hathaway |
| FuelCell Energy |
Berkshire Hathaway and FuelCell Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berkshire Hathaway and FuelCell Energy
The main advantage of trading using opposite Berkshire Hathaway and FuelCell Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Hathaway position performs unexpectedly, FuelCell Energy 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 FuelCell Energy will offset losses from the drop in FuelCell Energy's long position.| Berkshire Hathaway vs. Allianz SE VNA | Berkshire Hathaway vs. AXA SA | Berkshire Hathaway vs. AXA SA | Berkshire Hathaway vs. Assicurazioni Generali SpA |
| FuelCell Energy vs. DIVERSIFIED ROYALTY | FuelCell Energy vs. BJs Wholesale Club | FuelCell Energy vs. COSTCO WHOLESALE CDR | FuelCell Energy vs. Vastned Retail NV |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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