Correlation Between Cogeco Communications and Berkshire Hathaway
Can any of the company-specific risk be diversified away by investing in both Cogeco Communications and Berkshire Hathaway 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 Cogeco Communications and Berkshire Hathaway into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cogeco Communications and Berkshire Hathaway CDR, you can compare the effects of market volatilities on Cogeco Communications and Berkshire Hathaway 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 Cogeco Communications with a short position of Berkshire Hathaway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cogeco Communications and Berkshire Hathaway.
Diversification Opportunities for Cogeco Communications and Berkshire Hathaway
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Cogeco and Berkshire is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Cogeco Communications and Berkshire Hathaway CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berkshire Hathaway CDR and Cogeco Communications 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 Cogeco Communications are associated (or correlated) with Berkshire Hathaway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Berkshire Hathaway CDR has no effect on the direction of Cogeco Communications i.e., Cogeco Communications and Berkshire Hathaway go up and down completely randomly.
Pair Corralation between Cogeco Communications and Berkshire Hathaway
Assuming the 90 days trading horizon Cogeco Communications is expected to generate 1.43 times less return on investment than Berkshire Hathaway. In addition to that, Cogeco Communications is 1.73 times more volatile than Berkshire Hathaway CDR. It trades about 0.04 of its total potential returns per unit of risk. Berkshire Hathaway CDR is currently generating about 0.09 per unit of volatility. If you would invest 2,658 in Berkshire Hathaway CDR on September 12, 2024 and sell it today you would earn a total of 832.00 from holding Berkshire Hathaway CDR or generate 31.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cogeco Communications vs. Berkshire Hathaway CDR
Performance |
| Timeline |
| Cogeco Communications |
| Berkshire Hathaway CDR |
Cogeco Communications and Berkshire Hathaway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cogeco Communications and Berkshire Hathaway
The main advantage of trading using opposite Cogeco Communications and Berkshire Hathaway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cogeco Communications position performs unexpectedly, Berkshire Hathaway 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 Berkshire Hathaway will offset losses from the drop in Berkshire Hathaway's long position.| Cogeco Communications vs. Berkshire Hathaway CDR | Cogeco Communications vs. Microsoft Corp CDR | Cogeco Communications vs. Apple Inc CDR | Cogeco Communications vs. Alphabet Inc CDR |
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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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