Correlation Between Olympia Financial and Berkshire Hathaway
Can any of the company-specific risk be diversified away by investing in both Olympia Financial 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 Olympia Financial and Berkshire Hathaway into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Olympia Financial Group and Berkshire Hathaway CDR, you can compare the effects of market volatilities on Olympia Financial 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 Olympia Financial with a short position of Berkshire Hathaway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Olympia Financial and Berkshire Hathaway.
Diversification Opportunities for Olympia Financial and Berkshire Hathaway
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Olympia and Berkshire is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Olympia Financial Group 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 Olympia Financial 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 Olympia Financial Group 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 Olympia Financial i.e., Olympia Financial and Berkshire Hathaway go up and down completely randomly.
Pair Corralation between Olympia Financial and Berkshire Hathaway
Assuming the 90 days trading horizon Olympia Financial is expected to generate 29.59 times less return on investment than Berkshire Hathaway. But when comparing it to its historical volatility, Olympia Financial Group is 1.57 times less risky than Berkshire Hathaway. It trades about 0.02 of its potential returns per unit of risk. Berkshire Hathaway CDR is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 3,501 in Berkshire Hathaway CDR on December 4, 2024 and sell it today you would earn a total of 314.00 from holding Berkshire Hathaway CDR or generate 8.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Olympia Financial Group vs. Berkshire Hathaway CDR
Performance |
| Timeline |
| Olympia Financial |
| Berkshire Hathaway CDR |
Olympia Financial and Berkshire Hathaway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Olympia Financial and Berkshire Hathaway
The main advantage of trading using opposite Olympia Financial and Berkshire Hathaway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Olympia Financial 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.| Olympia Financial vs. Firm Capital Mortgage | Olympia Financial vs. Atrium Mortgage Investment | Olympia Financial vs. MCAN Mortgage | Olympia Financial vs. Accord Financial Corp |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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