Correlation Between Entourage Health and Berkshire Hathaway
Can any of the company-specific risk be diversified away by investing in both Entourage Health 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 Entourage Health and Berkshire Hathaway into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Entourage Health Corp and Berkshire Hathaway CDR, you can compare the effects of market volatilities on Entourage Health 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 Entourage Health with a short position of Berkshire Hathaway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Entourage Health and Berkshire Hathaway.
Diversification Opportunities for Entourage Health and Berkshire Hathaway
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Entourage and Berkshire is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Entourage Health Corp 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 Entourage Health 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 Entourage Health Corp 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 Entourage Health i.e., Entourage Health and Berkshire Hathaway go up and down completely randomly.
Pair Corralation between Entourage Health and Berkshire Hathaway
Assuming the 90 days trading horizon Entourage Health Corp is expected to generate 49.77 times more return on investment than Berkshire Hathaway. However, Entourage Health is 49.77 times more volatile than Berkshire Hathaway CDR. It trades about 0.2 of its potential returns per unit of risk. Berkshire Hathaway CDR is currently generating about -0.02 per unit of risk. If you would invest 0.50 in Entourage Health Corp on October 23, 2024 and sell it today you would earn a total of 0.50 from holding Entourage Health Corp or generate 100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Entourage Health Corp vs. Berkshire Hathaway CDR
Performance |
| Timeline |
| Entourage Health Corp |
| Berkshire Hathaway CDR |
Entourage Health and Berkshire Hathaway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Entourage Health and Berkshire Hathaway
The main advantage of trading using opposite Entourage Health and Berkshire Hathaway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Entourage Health 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.| Entourage Health vs. Berkshire Hathaway CDR | Entourage Health vs. JPMorgan Chase Co | Entourage Health vs. Bank of America | Entourage Health 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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