Correlation Between Dow Jones and BERKSHIRE
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By analyzing existing cross correlation between Dow Jones Industrial and BERKSHIRE HATHAWAY FIN, you can compare the effects of market volatilities on Dow Jones and BERKSHIRE 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 Dow Jones with a short position of BERKSHIRE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and BERKSHIRE.
Diversification Opportunities for Dow Jones and BERKSHIRE
Good diversification
The 3 months correlation between Dow and BERKSHIRE is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and BERKSHIRE HATHAWAY FIN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BERKSHIRE HATHAWAY FIN and Dow Jones 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 Dow Jones Industrial are associated (or correlated) with BERKSHIRE. 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 FIN has no effect on the direction of Dow Jones i.e., Dow Jones and BERKSHIRE go up and down completely randomly.
Pair Corralation between Dow Jones and BERKSHIRE
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.49 times more return on investment than BERKSHIRE. However, Dow Jones Industrial is 2.03 times less risky than BERKSHIRE. It trades about 0.34 of its potential returns per unit of risk. BERKSHIRE HATHAWAY FIN is currently generating about -0.02 per unit of risk. If you would invest 4,205,219 in Dow Jones Industrial on September 2, 2024 and sell it today you would earn a total of 285,846 from holding Dow Jones Industrial or generate 6.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. BERKSHIRE HATHAWAY FIN
Performance |
| Timeline |
Dow Jones and BERKSHIRE Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
BERKSHIRE HATHAWAY FIN
Pair trading matchups for BERKSHIRE
Pair Trading with Dow Jones and BERKSHIRE
The main advantage of trading using opposite Dow Jones and BERKSHIRE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, BERKSHIRE 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 will offset losses from the drop in BERKSHIRE's long position.| Dow Jones vs. Dream Finders Homes | Dow Jones vs. GEN Restaurant Group, | Dow Jones vs. National Beverage Corp | Dow Jones vs. BJs Restaurants |
| BERKSHIRE vs. Estee Lauder Companies | BERKSHIRE vs. RBC Bearings Incorporated | BERKSHIRE vs. Reservoir Media | BERKSHIRE vs. Steven Madden |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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