Correlation Between Catalyst Media and Berkshire Hathaway
Can any of the company-specific risk be diversified away by investing in both Catalyst Media 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 Catalyst Media and Berkshire Hathaway into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catalyst Media Group and Berkshire Hathaway, you can compare the effects of market volatilities on Catalyst Media 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 Catalyst Media with a short position of Berkshire Hathaway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Media and Berkshire Hathaway.
Diversification Opportunities for Catalyst Media and Berkshire Hathaway
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Catalyst and Berkshire is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Media Group and Berkshire Hathaway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berkshire Hathaway and Catalyst Media 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 Catalyst Media Group 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 has no effect on the direction of Catalyst Media i.e., Catalyst Media and Berkshire Hathaway go up and down completely randomly.
Pair Corralation between Catalyst Media and Berkshire Hathaway
Assuming the 90 days trading horizon Catalyst Media is expected to generate 116.5 times less return on investment than Berkshire Hathaway. In addition to that, Catalyst Media is 1.68 times more volatile than Berkshire Hathaway. It trades about 0.0 of its total potential returns per unit of risk. Berkshire Hathaway is currently generating about 0.09 per unit of volatility. If you would invest 31,323 in Berkshire Hathaway on September 3, 2024 and sell it today you would earn a total of 17,127 from holding Berkshire Hathaway or generate 54.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catalyst Media Group vs. Berkshire Hathaway
Performance |
| Timeline |
| Catalyst Media Group |
| Berkshire Hathaway |
Catalyst Media and Berkshire Hathaway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalyst Media and Berkshire Hathaway
The main advantage of trading using opposite Catalyst Media and Berkshire Hathaway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Media 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.| Catalyst Media vs. Smithson Investment Trust | Catalyst Media vs. Kinnevik Investment AB | Catalyst Media vs. New Residential Investment | Catalyst Media vs. The Mercantile Investment |
| Berkshire Hathaway vs. Catalyst Media Group | Berkshire Hathaway vs. CATLIN GROUP | Berkshire Hathaway vs. Magnora ASA | Berkshire Hathaway vs. RTW Venture Fund |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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