Correlation Between Nasdaq and BERKSHIRE
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By analyzing existing cross correlation between Nasdaq Inc and BERKSHIRE HATHAWAY FIN, you can compare the effects of market volatilities on Nasdaq 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 Nasdaq with a short position of BERKSHIRE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq and BERKSHIRE.
Diversification Opportunities for Nasdaq and BERKSHIRE
Very weak diversification
The 3 months correlation between Nasdaq and BERKSHIRE is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc 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 Nasdaq 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 Nasdaq Inc 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 Nasdaq i.e., Nasdaq and BERKSHIRE go up and down completely randomly.
Pair Corralation between Nasdaq and BERKSHIRE
Given the investment horizon of 90 days Nasdaq Inc is expected to generate 1.06 times more return on investment than BERKSHIRE. However, Nasdaq is 1.06 times more volatile than BERKSHIRE HATHAWAY FIN. It trades about 0.15 of its potential returns per unit of risk. BERKSHIRE HATHAWAY FIN is currently generating about 0.0 per unit of risk. If you would invest 5,814 in Nasdaq Inc on November 28, 2024 and sell it today you would earn a total of 2,180 from holding Nasdaq Inc or generate 37.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nasdaq Inc vs. BERKSHIRE HATHAWAY FIN
Performance |
| Timeline |
| Nasdaq Inc |
| BERKSHIRE HATHAWAY FIN |
Nasdaq and BERKSHIRE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq and BERKSHIRE
The main advantage of trading using opposite Nasdaq and BERKSHIRE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq 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.The idea behind Nasdaq Inc and BERKSHIRE HATHAWAY FIN 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 vs. Alto Neuroscience, | BERKSHIRE vs. Xponential Fitness | BERKSHIRE vs. Li Auto | BERKSHIRE vs. Regeneron Pharmaceuticals |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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