Correlation Between Enthusiast Gaming and Berkshire Hathaway
Can any of the company-specific risk be diversified away by investing in both Enthusiast Gaming 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 Enthusiast Gaming and Berkshire Hathaway into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enthusiast Gaming Holdings and Berkshire Hathaway CDR, you can compare the effects of market volatilities on Enthusiast Gaming 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 Enthusiast Gaming with a short position of Berkshire Hathaway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enthusiast Gaming and Berkshire Hathaway.
Diversification Opportunities for Enthusiast Gaming and Berkshire Hathaway
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Enthusiast and Berkshire is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Enthusiast Gaming Holdings 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 Enthusiast Gaming 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 Enthusiast Gaming Holdings 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 Enthusiast Gaming i.e., Enthusiast Gaming and Berkshire Hathaway go up and down completely randomly.
Pair Corralation between Enthusiast Gaming and Berkshire Hathaway
Assuming the 90 days trading horizon Enthusiast Gaming Holdings is expected to generate 9.31 times more return on investment than Berkshire Hathaway. However, Enthusiast Gaming is 9.31 times more volatile than Berkshire Hathaway CDR. It trades about 0.08 of its potential returns per unit of risk. Berkshire Hathaway CDR is currently generating about -0.07 per unit of risk. If you would invest 13.00 in Enthusiast Gaming Holdings on September 12, 2024 and sell it today you would earn a total of 1.00 from holding Enthusiast Gaming Holdings or generate 7.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enthusiast Gaming Holdings vs. Berkshire Hathaway CDR
Performance |
| Timeline |
| Enthusiast Gaming |
| Berkshire Hathaway CDR |
Enthusiast Gaming and Berkshire Hathaway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enthusiast Gaming and Berkshire Hathaway
The main advantage of trading using opposite Enthusiast Gaming and Berkshire Hathaway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enthusiast Gaming 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.| Enthusiast Gaming vs. Berkshire Hathaway CDR | Enthusiast Gaming vs. Microsoft Corp CDR | Enthusiast Gaming vs. Apple Inc CDR | Enthusiast Gaming 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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