Correlation Between Exxon and BERKSHIRE
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By analyzing existing cross correlation between Exxon Mobil Corp and BERKSHIRE HATHAWAY FIN, you can compare the effects of market volatilities on Exxon 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 Exxon with a short position of BERKSHIRE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and BERKSHIRE.
Diversification Opportunities for Exxon and BERKSHIRE
Very good diversification
The 3 months correlation between Exxon and BERKSHIRE is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp 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 Exxon 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 Exxon Mobil Corp 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 Exxon i.e., Exxon and BERKSHIRE go up and down completely randomly.
Pair Corralation between Exxon and BERKSHIRE
Considering the 90-day investment horizon Exxon Mobil Corp is expected to generate 0.6 times more return on investment than BERKSHIRE. However, Exxon Mobil Corp is 1.67 times less risky than BERKSHIRE. It trades about 0.15 of its potential returns per unit of risk. BERKSHIRE HATHAWAY FIN is currently generating about -0.02 per unit of risk. If you would invest 11,401 in Exxon Mobil Corp on September 2, 2024 and sell it today you would earn a total of 395.00 from holding Exxon Mobil Corp or generate 3.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Exxon Mobil Corp vs. BERKSHIRE HATHAWAY FIN
Performance |
| Timeline |
| Exxon Mobil Corp |
| BERKSHIRE HATHAWAY FIN |
Exxon and BERKSHIRE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon and BERKSHIRE
The main advantage of trading using opposite Exxon and BERKSHIRE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon 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 Exxon Mobil Corp 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. Estee Lauder Companies | BERKSHIRE vs. RBC Bearings Incorporated | BERKSHIRE vs. Reservoir Media | BERKSHIRE vs. Steven Madden |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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