Correlation Between Lion One and Berkshire Hathaway
Can any of the company-specific risk be diversified away by investing in both Lion One 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 Lion One and Berkshire Hathaway into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lion One Metals and Berkshire Hathaway CDR, you can compare the effects of market volatilities on Lion One 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 Lion One with a short position of Berkshire Hathaway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and Berkshire Hathaway.
Diversification Opportunities for Lion One and Berkshire Hathaway
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lion and Berkshire is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals 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 Lion One 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 Lion One Metals 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 Lion One i.e., Lion One and Berkshire Hathaway go up and down completely randomly.
Pair Corralation between Lion One and Berkshire Hathaway
Assuming the 90 days horizon Lion One Metals is expected to under-perform the Berkshire Hathaway. In addition to that, Lion One is 4.27 times more volatile than Berkshire Hathaway CDR. It trades about -0.04 of its total potential returns per unit of risk. Berkshire Hathaway CDR is currently generating about 0.09 per unit of volatility. If you would invest 2,390 in Berkshire Hathaway CDR on October 25, 2024 and sell it today you would earn a total of 1,077 from holding Berkshire Hathaway CDR or generate 45.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Lion One Metals vs. Berkshire Hathaway CDR
Performance |
| Timeline |
| Lion One Metals |
| Berkshire Hathaway CDR |
Lion One and Berkshire Hathaway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion One and Berkshire Hathaway
The main advantage of trading using opposite Lion One and Berkshire Hathaway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One 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.The idea behind Lion One Metals and Berkshire Hathaway CDR pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Berkshire Hathaway vs. Lion One Metals | Berkshire Hathaway vs. BluMetric Environmental | Berkshire Hathaway vs. High Liner Foods | Berkshire Hathaway vs. Gfl Environmental Holdings |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |