Correlation Between Berkshire Hathaway and LOREAL ADR
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By analyzing existing cross correlation between Berkshire Hathaway and LOREAL ADR 15EO, you can compare the effects of market volatilities on Berkshire Hathaway and LOREAL ADR 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 LOREAL ADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hathaway and LOREAL ADR.
Diversification Opportunities for Berkshire Hathaway and LOREAL ADR
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Berkshire and LOREAL is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hathaway and LOREAL ADR 15EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LOREAL ADR 15EO 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 LOREAL ADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LOREAL ADR 15EO has no effect on the direction of Berkshire Hathaway i.e., Berkshire Hathaway and LOREAL ADR go up and down completely randomly.
Pair Corralation between Berkshire Hathaway and LOREAL ADR
Assuming the 90 days trading horizon Berkshire Hathaway is expected to generate 0.39 times more return on investment than LOREAL ADR. However, Berkshire Hathaway is 2.58 times less risky than LOREAL ADR. It trades about 0.24 of its potential returns per unit of risk. LOREAL ADR 15EO is currently generating about -0.07 per unit of risk. If you would invest 44,720 in Berkshire Hathaway on November 28, 2024 and sell it today you would earn a total of 2,260 from holding Berkshire Hathaway or generate 5.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Berkshire Hathaway vs. LOREAL ADR 15EO
Performance |
| Timeline |
| Berkshire Hathaway |
| LOREAL ADR 15EO |
Berkshire Hathaway and LOREAL ADR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berkshire Hathaway and LOREAL ADR
The main advantage of trading using opposite Berkshire Hathaway and LOREAL ADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Hathaway position performs unexpectedly, LOREAL ADR 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 LOREAL ADR will offset losses from the drop in LOREAL ADR's long position.| Berkshire Hathaway vs. Corsair Gaming | Berkshire Hathaway vs. JAPAN TOBACCO UNSPADR12 | Berkshire Hathaway vs. GEAR4MUSIC LS 10 | Berkshire Hathaway vs. American Eagle Outfitters |
| LOREAL ADR vs. REINET INVESTMENTS SCA | LOREAL ADR vs. New Residential Investment | LOREAL ADR vs. Zoom Video Communications | LOREAL ADR vs. Apollo Investment 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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