Correlation Between Edita Food and Berkshire Hathaway
Can any of the company-specific risk be diversified away by investing in both Edita Food 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 Edita Food and Berkshire Hathaway into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Edita Food Industries and Berkshire Hathaway, you can compare the effects of market volatilities on Edita Food 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 Edita Food with a short position of Berkshire Hathaway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edita Food and Berkshire Hathaway.
Diversification Opportunities for Edita Food and Berkshire Hathaway
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Edita and Berkshire is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Edita Food Industries and Berkshire Hathaway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berkshire Hathaway and Edita Food 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 Edita Food Industries 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 Edita Food i.e., Edita Food and Berkshire Hathaway go up and down completely randomly.
Pair Corralation between Edita Food and Berkshire Hathaway
If you would invest 45,250 in Berkshire Hathaway on October 20, 2024 and sell it today you would earn a total of 1,575 from holding Berkshire Hathaway or generate 3.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Edita Food Industries vs. Berkshire Hathaway
Performance |
| Timeline |
| Edita Food Industries |
| Berkshire Hathaway |
Edita Food and Berkshire Hathaway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edita Food and Berkshire Hathaway
The main advantage of trading using opposite Edita Food and Berkshire Hathaway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edita Food 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.| Edita Food vs. URU Metals | Edita Food vs. AfriTin Mining | Edita Food vs. Griffin Mining | Edita Food vs. CNH Industrial NV |
| Berkshire Hathaway vs. Ebro Foods | Berkshire Hathaway vs. Edita Food Industries | Berkshire Hathaway vs. Fresenius Medical Care | Berkshire Hathaway vs. Associated British Foods |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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