Correlation Between Home Depot and BERKSHIRE
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By analyzing existing cross correlation between Home Depot and BERKSHIRE HATHAWAY FIN, you can compare the effects of market volatilities on Home Depot 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 Home Depot with a short position of BERKSHIRE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and BERKSHIRE.
Diversification Opportunities for Home Depot and BERKSHIRE
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Home and BERKSHIRE is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Home Depot 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 Home Depot 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 Home Depot 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 Home Depot i.e., Home Depot and BERKSHIRE go up and down completely randomly.
Pair Corralation between Home Depot and BERKSHIRE
Allowing for the 90-day total investment horizon Home Depot is expected to generate 1.13 times less return on investment than BERKSHIRE. But when comparing it to its historical volatility, Home Depot is 1.57 times less risky than BERKSHIRE. It trades about 0.16 of its potential returns per unit of risk. BERKSHIRE HATHAWAY FIN is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 9,360 in BERKSHIRE HATHAWAY FIN on August 26, 2024 and sell it today you would earn a total of 554.00 from holding BERKSHIRE HATHAWAY FIN or generate 5.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Home Depot vs. BERKSHIRE HATHAWAY FIN
Performance |
| Timeline |
| Home Depot |
| BERKSHIRE HATHAWAY FIN |
Home Depot and BERKSHIRE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Depot and BERKSHIRE
The main advantage of trading using opposite Home Depot and BERKSHIRE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Depot 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.| Home Depot vs. Arhaus Inc | Home Depot vs. Haverty Furniture Companies | Home Depot vs. Kirklands | Home Depot vs. Haverty Furniture Companies |
| BERKSHIRE vs. AEP TEX INC | BERKSHIRE vs. US BANK NATIONAL | BERKSHIRE vs. Eat Beyond Global | BERKSHIRE vs. Charles Schwab Corp |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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