Correlation Between Diamyd Medical and Berkshire Hathaway
Can any of the company-specific risk be diversified away by investing in both Diamyd Medical 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 Diamyd Medical and Berkshire Hathaway into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Diamyd Medical AB and Berkshire Hathaway, you can compare the effects of market volatilities on Diamyd Medical 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 Diamyd Medical with a short position of Berkshire Hathaway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamyd Medical and Berkshire Hathaway.
Diversification Opportunities for Diamyd Medical and Berkshire Hathaway
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Diamyd and Berkshire is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Diamyd Medical AB and Berkshire Hathaway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berkshire Hathaway and Diamyd Medical 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 Diamyd Medical AB 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 Diamyd Medical i.e., Diamyd Medical and Berkshire Hathaway go up and down completely randomly.
Pair Corralation between Diamyd Medical and Berkshire Hathaway
Assuming the 90 days horizon Diamyd Medical AB is expected to generate 5.01 times more return on investment than Berkshire Hathaway. However, Diamyd Medical is 5.01 times more volatile than Berkshire Hathaway. It trades about 0.03 of its potential returns per unit of risk. Berkshire Hathaway is currently generating about 0.11 per unit of risk. If you would invest 91.00 in Diamyd Medical AB on August 28, 2024 and sell it today you would earn a total of 8.00 from holding Diamyd Medical AB or generate 8.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.72% |
| Values | Daily Returns |
Diamyd Medical AB vs. Berkshire Hathaway
Performance |
| Timeline |
| Diamyd Medical AB |
| Berkshire Hathaway |
Diamyd Medical and Berkshire Hathaway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamyd Medical and Berkshire Hathaway
The main advantage of trading using opposite Diamyd Medical and Berkshire Hathaway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamyd Medical 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.| Diamyd Medical vs. Superior Plus Corp | Diamyd Medical vs. NMI Holdings | Diamyd Medical vs. Origin Agritech | Diamyd Medical vs. SIVERS SEMICONDUCTORS AB |
| Berkshire Hathaway vs. Berkshire Hathaway | Berkshire Hathaway vs. Superior Plus Corp | Berkshire Hathaway vs. NMI Holdings | Berkshire Hathaway vs. Origin Agritech |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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