Correlation Between CHINA HUARONG and Berkshire Hathaway
Can any of the company-specific risk be diversified away by investing in both CHINA HUARONG 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 CHINA HUARONG and Berkshire Hathaway into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHINA HUARONG ENERHD 50 and Berkshire Hathaway, you can compare the effects of market volatilities on CHINA HUARONG 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 CHINA HUARONG with a short position of Berkshire Hathaway. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA HUARONG and Berkshire Hathaway.
Diversification Opportunities for CHINA HUARONG and Berkshire Hathaway
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CHINA and Berkshire is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding CHINA HUARONG ENERHD 50 and Berkshire Hathaway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berkshire Hathaway and CHINA HUARONG 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 CHINA HUARONG ENERHD 50 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 CHINA HUARONG i.e., CHINA HUARONG and Berkshire Hathaway go up and down completely randomly.
Pair Corralation between CHINA HUARONG and Berkshire Hathaway
Assuming the 90 days trading horizon CHINA HUARONG ENERHD 50 is expected to generate 36.25 times more return on investment than Berkshire Hathaway. However, CHINA HUARONG is 36.25 times more volatile than Berkshire Hathaway. It trades about 0.13 of its potential returns per unit of risk. Berkshire Hathaway is currently generating about 0.11 per unit of risk. If you would invest 0.05 in CHINA HUARONG ENERHD 50 on September 12, 2024 and sell it today you would earn a total of 0.10 from holding CHINA HUARONG ENERHD 50 or generate 200.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
CHINA HUARONG ENERHD 50 vs. Berkshire Hathaway
Performance |
| Timeline |
| CHINA HUARONG ENERHD |
| Berkshire Hathaway |
CHINA HUARONG and Berkshire Hathaway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHINA HUARONG and Berkshire Hathaway
The main advantage of trading using opposite CHINA HUARONG and Berkshire Hathaway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA HUARONG 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.| CHINA HUARONG vs. Air Transport Services | CHINA HUARONG vs. Liberty Broadband | CHINA HUARONG vs. TEXAS ROADHOUSE | CHINA HUARONG vs. NORWEGIAN AIR SHUT |
| Berkshire Hathaway vs. Zurich Insurance Group | Berkshire Hathaway vs. Superior Plus Corp | Berkshire Hathaway vs. SIVERS SEMICONDUCTORS AB | Berkshire Hathaway vs. CHINA HUARONG ENERHD 50 |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |