Correlation Between Identiv and Berkshire Hathaway
Can any of the company-specific risk be diversified away by investing in both Identiv 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 Identiv and Berkshire Hathaway into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Identiv and Berkshire Hathaway, you can compare the effects of market volatilities on Identiv 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 Identiv with a short position of Berkshire Hathaway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Identiv and Berkshire Hathaway.
Diversification Opportunities for Identiv and Berkshire Hathaway
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Identiv and Berkshire is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Identiv and Berkshire Hathaway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berkshire Hathaway and Identiv 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 Identiv 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 Identiv i.e., Identiv and Berkshire Hathaway go up and down completely randomly.
Pair Corralation between Identiv and Berkshire Hathaway
Assuming the 90 days trading horizon Identiv is expected to generate 1.81 times more return on investment than Berkshire Hathaway. However, Identiv is 1.81 times more volatile than Berkshire Hathaway. It trades about 0.14 of its potential returns per unit of risk. Berkshire Hathaway is currently generating about 0.14 per unit of risk. If you would invest 310.00 in Identiv on August 25, 2024 and sell it today you would earn a total of 50.00 from holding Identiv or generate 16.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Identiv vs. Berkshire Hathaway
Performance |
| Timeline |
| Identiv |
| Berkshire Hathaway |
Identiv and Berkshire Hathaway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Identiv and Berkshire Hathaway
The main advantage of trading using opposite Identiv and Berkshire Hathaway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Identiv 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.| Identiv vs. COVIVIO HOTELS INH | Identiv vs. Alaska Air Group | Identiv vs. Hyatt Hotels | Identiv vs. LAir Liquide SA |
| Berkshire Hathaway vs. Zurich Insurance Group | 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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