Berkshire Hathaway Stock Volatility
| BRK-B Stock | USD 476.57 4.51 0.96% |
At this point, Berkshire Hathaway is very steady. Berkshire Hathaway secures Sharpe Ratio (or Efficiency) of 0.0714, which signifies that the company had a 0.0714% return per unit of risk over the last 3 months. We have found thirty technical indicators for Berkshire Hathaway, which you can use to evaluate the volatility of the firm. Please confirm Berkshire Hathaway's Risk Adjusted Performance of 0.0699, mean deviation of 0.7455, and Downside Deviation of 0.9896 to double-check if the risk estimate we provide is consistent with the expected return of 0.079%. Key indicators related to Berkshire Hathaway's volatility include:
690 Days Market Risk | Chance Of Distress | 690 Days Economic Sensitivity |
Berkshire Hathaway Stock volatility depicts how high the prices fluctuate around the mean (or its average) price. In other words, it is a statistical measure of the distribution of Berkshire daily returns, and it is calculated using variance and standard deviation. We also use Berkshire's beta, its sensitivity to the market, as well as its odds of financial distress to provide a more practical estimation of Berkshire Hathaway volatility.
Berkshire |
ESG Sustainability
While most ESG disclosures are voluntary, Berkshire Hathaway's sustainability indicators can be used to identify proper investment strategies using environmental, social, and governance scores that are crucial to Berkshire Hathaway's managers and investors.Environment Score | Governance Score | Social Score |
Since volatility provides investors with entry points to take advantage of stock prices, companies, such as Berkshire Hathaway can benefit from it. Downward market volatility can be a perfect environment for investors who play the long game as hey may decide to buy additional stocks of Berkshire Hathaway at lower prices to lower their average cost per share. Similarly, when the prices of Berkshire Hathaway's stock rise, investors can sell out and invest the proceeds in other equities with better opportunities.
Moving together with Berkshire Stock
Moving against Berkshire Stock
Berkshire Hathaway Market Sensitivity And Downside Risk
Berkshire Hathaway's beta coefficient measures the volatility of Berkshire stock compared to the systematic risk of the entire market represented by your selected benchmark. In mathematical terms, beta represents the slope of the line through a regression of data points where each of these points represents Berkshire stock's returns against your selected market. In other words, Berkshire Hathaway's beta of 0.97 provides an investor with an approximation of how much risk Berkshire Hathaway stock can potentially add to one of your existing portfolios. Berkshire Hathaway has low volatility with Treynor Ratio of 0.09, Maximum Drawdown of 7.23 and kurtosis of 7.55. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Berkshire Hathaway's stock risk against market volatility during both bullish and bearish trends. The higher level of volatility that comes with bear markets can directly impact Berkshire Hathaway's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different financial instruments as prices fall.
3 Months Beta |Analyze Berkshire Hathaway Demand TrendCheck current 90 days Berkshire Hathaway correlation with market (Dow Jones Industrial)Berkshire Beta |
Berkshire standard deviation measures the daily dispersion of prices over your selected time horizon relative to its mean. A typical volatile entity has a high standard deviation, while the deviation of a stable instrument is usually low. As a downside, the standard deviation calculates all uncertainty as risk, even when it is in your favor, such as above-average returns.
Standard Deviation | 1.11 |
It is essential to understand the difference between upside risk (as represented by Berkshire Hathaway's standard deviation) and the downside risk, which can be measured by semi-deviation or downside deviation of Berkshire Hathaway's daily returns or price. Since the actual investment returns on holding a position in berkshire stock tend to have a non-normal distribution, there will be different probabilities for losses than for gains. The likelihood of losses is reflected in the downside risk of an investment in Berkshire Hathaway.
Berkshire Hathaway Stock Volatility Analysis
Volatility refers to the frequency at which Berkshire Hathaway stock price increases or decreases within a specified period. These fluctuations usually indicate the level of risk that's associated with Berkshire Hathaway's price changes. Investors will then calculate the volatility of Berkshire Hathaway's stock to predict their future moves. A stock that has erratic price changes quickly hits new highs, and lows are considered highly volatile. A stock with relatively stable price changes has low volatility. A highly volatile stock is riskier, but the risk cuts both ways. Investing in highly volatile security can either be highly successful, or you may experience significant failure. There are two main types of Berkshire Hathaway's volatility:
Historical Volatility
This type of stock volatility measures Berkshire Hathaway's fluctuations based on previous trends. It's commonly used to predict Berkshire Hathaway's future behavior based on its past. However, it cannot conclusively determine the future direction of the stock.Implied Volatility
This type of volatility provides a positive outlook on future price fluctuations for Berkshire Hathaway's current market price. This means that the stock will return to its initially predicted market price. This type of volatility can be derived from derivative instruments written on Berkshire Hathaway's to be redeemed at a future date.Transformation |
The output start index for this execution was zero with a total number of output elements of sixty-one. Berkshire Hathaway Average Price is the average of the sum of open, high, low and close daily prices of a bar. It can be used to smooth an indicator that normally takes just the closing price as input.
Berkshire Hathaway Projected Return Density Against Market
Assuming the 90 days horizon Berkshire Hathaway has a beta of 0.9718 suggesting Berkshire Hathaway market returns are sensitive to returns on the market. As the market goes up or down, Berkshire Hathaway is expected to follow.Most traded equities are subject to two types of risk - systematic (i.e., market) and unsystematic (i.e., nonmarket or company-specific) risk. Unsystematic risk is the risk that events specific to Berkshire Hathaway or Financial Services sector will adversely affect the stock's price. This type of risk can be diversified away by owning several different stocks in different industries whose stock prices have shown a small correlation to each other. On the other hand, systematic risk is the risk that Berkshire Hathaway's price will be affected by overall stock market movements and cannot be diversified away. So, no matter how many positions you have, you cannot eliminate market risk. However, you can measure a Berkshire stock's historical response to market movements and buy it if you are comfortable with its volatility direction. Beta and standard deviation are two commonly used measures to help you make the right decision.
Berkshire Hathaway has a negative alpha, implying that the risk taken by holding this instrument is not justified. The company is significantly underperforming the Dow Jones Industrial. Predicted Return Density |
| Returns |
What Drives a Berkshire Hathaway Price Volatility?
Several factors can influence a stock's market volatility:Industry
Specific events can influence volatility within a particular industry. For instance, a significant weather upheaval in a crucial oil-production site may cause oil prices to increase in the oil sector. The direct result will be the rise in the stock price of oil distribution companies. Similarly, any government regulation in a specific industry could negatively influence stock prices due to increased regulations on compliance that may impact the company's future earnings and growth.Political and Economic environment
When governments make significant decisions regarding trade agreements, policies, and legislation regarding specific industries, they will influence stock prices. Everything from speeches to elections may influence investors, who can directly influence the stock prices in any particular industry. The prevailing economic situation also plays a significant role in stock prices. When the economy is doing well, investors will have a positive reaction and hence, better stock prices and vice versa.The Company's Performance
Sometimes volatility will only affect an individual company. For example, a revolutionary product launch or strong earnings report may attract many investors to purchase the company. This positive attention will raise the company's stock price. In contrast, product recalls and data breaches may negatively influence a company's stock prices.Berkshire Hathaway Stock Risk Measures
Assuming the 90 days horizon the coefficient of variation of Berkshire Hathaway is 1399.75. The daily returns are distributed with a variance of 1.22 and standard deviation of 1.11. The mean deviation of Berkshire Hathaway is currently at 0.74. For similar time horizon, the selected benchmark (Dow Jones Industrial) has volatility of 0.77
α | Alpha over Dow Jones | -0.03 | |
β | Beta against Dow Jones | 0.97 | |
σ | Overall volatility | 1.11 | |
Ir | Information ratio | -0.03 |
Berkshire Hathaway Stock Return Volatility
Berkshire Hathaway historical daily return volatility represents how much of Berkshire Hathaway stock's daily returns swing around its mean - it is a statistical measure of its dispersion of returns. The company shows 1.1054% volatility of returns over 90 . By contrast, Dow Jones Industrial accepts 0.7626% volatility on return distribution over the 90 days horizon. Performance |
| Timeline |
About Berkshire Hathaway Volatility
Volatility is a rate at which the price of Berkshire Hathaway or any other equity instrument increases or decreases for a given set of returns. It is measured by calculating the standard deviation of the annualized returns over a given period of time and shows the range to which the price of Berkshire Hathaway may increase or decrease. In other words, similar to Berkshire's beta indicator, it measures the risk of Berkshire Hathaway and helps estimate the fluctuations that may happen in a short period of time. So if prices of Berkshire Hathaway fluctuate rapidly in a short time span, it is termed to have high volatility, and if it swings slowly in a more extended period, it is understood to have low volatility.
Please read more on our technical analysis page.Berkshire Hathaway Inc., through its subsidiaries, engages in the insurance, freight rail transportation, and utility businesses worldwide. The company was incorporated in 1998 and is headquartered in Omaha, Nebraska. Berkshire Hathaway operates under InsuranceDiversified classification in the United States and is traded on NYQ Exchange. It employs 360000 people.
Berkshire Hathaway's stock volatility refers to the amount of uncertainty or risk involved with the size of changes in its stock's price. It is a statistical measure of the dispersion of returns on Berkshire Stock over a specified period of time, often expressed as the standard deviation of daily returns. In other words, it measures how much Berkshire Hathaway's price varies over time.
3 ways to utilize Berkshire Hathaway's volatility to invest better
Higher Berkshire Hathaway's stock volatility means that the price of its stock is changing rapidly and unpredictably, while lower stock volatility indicates that the price of Berkshire Hathaway stock is relatively stable. Investors and traders use stock volatility as an indicator of risk and potential reward, as stocks with higher volatility can offer the potential for more significant returns but also come with a greater risk of losses. Berkshire Hathaway stock volatility can provide helpful information for making investment decisions in the following ways:- Measuring Risk: Volatility can be used as a measure of risk, which can help you determine the potential fluctuations in the value of Berkshire Hathaway investment. A higher volatility means higher risk and potentially larger changes in value.
- Identifying Opportunities: High volatility in Berkshire Hathaway's stock can indicate that there is potential for significant price movements, either up or down, which could present investment opportunities.
- Diversification: Understanding how the volatility of Berkshire Hathaway's stock relates to your other investments can help you create a well-diversified portfolio of assets with varying levels of risk.
Berkshire Hathaway Investment Opportunity
Berkshire Hathaway has a volatility of 1.11 and is 1.46 times more volatile than Dow Jones Industrial. 9 percent of all equities and portfolios are less risky than Berkshire Hathaway. You can use Berkshire Hathaway to enhance the returns of your portfolios. The stock experiences a moderate upward volatility. Check odds of Berkshire Hathaway to be traded at $524.23 in 90 days.Poor diversification
The correlation between Berkshire Hathaway and DJI is 0.68 (i.e., Poor diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hathaway and DJI in the same portfolio, assuming nothing else is changed.
Berkshire Hathaway Additional Risk Indicators
The analysis of Berkshire Hathaway's secondary risk indicators is one of the essential steps in making a buy or sell decision. The process involves identifying the amount of risk involved in Berkshire Hathaway's investment and either accepting that risk or mitigating it. Along with some common measures of Berkshire Hathaway stock's risk such as standard deviation, beta, or value at risk, we also provide a set of secondary indicators that can assist in the individual investment decision or help in hedging the risk of your existing portfolios.
| Risk Adjusted Performance | 0.0699 | |||
| Market Risk Adjusted Performance | 0.0987 | |||
| Mean Deviation | 0.7455 | |||
| Semi Deviation | 0.8607 | |||
| Downside Deviation | 0.9896 | |||
| Coefficient Of Variation | 1146.46 | |||
| Standard Deviation | 1.1 |
Please note, the risk measures we provide can be used independently or collectively to perform a risk assessment. When comparing two potential stocks, we recommend comparing similar stocks with homogenous growth potential and valuation from related markets to determine which investment holds the most risk.
Berkshire Hathaway Suggested Diversification Pairs
Pair trading is one of the very effective strategies used by professional day traders and hedge funds capitalizing on short-time and mid-term market inefficiencies. The approach is based on the fact that the ratio of prices of two correlating shares is long-term stable and oscillates around the average value. If the correlation ratio comes outside the common area, you can speculate with a high success rate that the ratio will return to the mean value and collect a profit.
The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against Berkshire Hathaway as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. Berkshire Hathaway's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, Berkshire Hathaway's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to Berkshire Hathaway.
Complementary Tools for Berkshire Stock analysis
When running Berkshire Hathaway's price analysis, check to measure Berkshire Hathaway's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Berkshire Hathaway is operating at the current time. Most of Berkshire Hathaway's value examination focuses on studying past and present price action to predict the probability of Berkshire Hathaway's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Berkshire Hathaway's price. Additionally, you may evaluate how the addition of Berkshire Hathaway to your portfolios can decrease your overall portfolio volatility.
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Global Correlations Find global opportunities by holding instruments from different markets |