Correlation Between McEwen Mining and Berkshire Hathaway
Can any of the company-specific risk be diversified away by investing in both McEwen Mining 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 McEwen Mining and Berkshire Hathaway into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between McEwen Mining and Berkshire Hathaway, you can compare the effects of market volatilities on McEwen Mining 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 McEwen Mining with a short position of Berkshire Hathaway. Check out your portfolio center. Please also check ongoing floating volatility patterns of McEwen Mining and Berkshire Hathaway.
Diversification Opportunities for McEwen Mining and Berkshire Hathaway
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between McEwen and Berkshire is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding McEwen Mining and Berkshire Hathaway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berkshire Hathaway and McEwen Mining 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 McEwen Mining 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 McEwen Mining i.e., McEwen Mining and Berkshire Hathaway go up and down completely randomly.
Pair Corralation between McEwen Mining and Berkshire Hathaway
If you would invest 918,900 in Berkshire Hathaway on September 2, 2024 and sell it today you would earn a total of 66,100 from holding Berkshire Hathaway or generate 7.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
McEwen Mining vs. Berkshire Hathaway
Performance |
| Timeline |
| McEwen Mining |
| Berkshire Hathaway |
McEwen Mining and Berkshire Hathaway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McEwen Mining and Berkshire Hathaway
The main advantage of trading using opposite McEwen Mining and Berkshire Hathaway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McEwen Mining 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.| McEwen Mining vs. Prudential Financial | McEwen Mining vs. FIBRA Storage | McEwen Mining vs. Ameriprise Financial | McEwen Mining vs. KB Home |
| Berkshire Hathaway vs. FibraHotel | Berkshire Hathaway vs. Martin Marietta Materials | Berkshire Hathaway vs. Prudential Financial | Berkshire Hathaway vs. Southern Copper |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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