Correlation Between Lycos Energy and Berkshire Hathaway
Can any of the company-specific risk be diversified away by investing in both Lycos Energy 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 Lycos Energy and Berkshire Hathaway into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lycos Energy and Berkshire Hathaway CDR, you can compare the effects of market volatilities on Lycos Energy 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 Lycos Energy with a short position of Berkshire Hathaway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lycos Energy and Berkshire Hathaway.
Diversification Opportunities for Lycos Energy and Berkshire Hathaway
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Lycos and Berkshire is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Lycos Energy 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 Lycos Energy 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 Lycos Energy 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 Lycos Energy i.e., Lycos Energy and Berkshire Hathaway go up and down completely randomly.
Pair Corralation between Lycos Energy and Berkshire Hathaway
Assuming the 90 days horizon Lycos Energy is expected to under-perform the Berkshire Hathaway. In addition to that, Lycos Energy is 2.79 times more volatile than Berkshire Hathaway CDR. It trades about -0.03 of its total potential returns per unit of risk. Berkshire Hathaway CDR is currently generating about -0.02 per unit of volatility. If you would invest 3,627 in Berkshire Hathaway CDR on September 4, 2024 and sell it today you would lose (74.00) from holding Berkshire Hathaway CDR or give up 2.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lycos Energy vs. Berkshire Hathaway CDR
Performance |
| Timeline |
| Lycos Energy |
| Berkshire Hathaway CDR |
Lycos Energy and Berkshire Hathaway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lycos Energy and Berkshire Hathaway
The main advantage of trading using opposite Lycos Energy and Berkshire Hathaway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lycos Energy 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.| Lycos Energy vs. Caribbean Utilities | Lycos Energy vs. Medical Facilities | Lycos Energy vs. Canadian Imperial Bank | Lycos Energy vs. First National Financial |
| Berkshire Hathaway vs. Lycos Energy | Berkshire Hathaway vs. Scandium Canada | Berkshire Hathaway vs. Voice Mobility International | Berkshire Hathaway vs. Martina Minerals 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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