Correlation Between Berkshire Hathaway and Blackstone
Can any of the company-specific risk be diversified away by investing in both Berkshire Hathaway and Blackstone 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 Berkshire Hathaway and Blackstone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berkshire Hathaway and Blackstone Group, you can compare the effects of market volatilities on Berkshire Hathaway and Blackstone 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 Berkshire Hathaway with a short position of Blackstone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hathaway and Blackstone.
Diversification Opportunities for Berkshire Hathaway and Blackstone
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Berkshire and Blackstone is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hathaway and Blackstone Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackstone Group and Berkshire Hathaway 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 Berkshire Hathaway are associated (or correlated) with Blackstone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackstone Group has no effect on the direction of Berkshire Hathaway i.e., Berkshire Hathaway and Blackstone go up and down completely randomly.
Pair Corralation between Berkshire Hathaway and Blackstone
Assuming the 90 days horizon Berkshire Hathaway is expected to generate 0.39 times more return on investment than Blackstone. However, Berkshire Hathaway is 2.54 times less risky than Blackstone. It trades about -0.01 of its potential returns per unit of risk. Blackstone Group is currently generating about -0.08 per unit of risk. If you would invest 40,992 in Berkshire Hathaway on January 25, 2024 and sell it today you would lose (118.00) from holding Berkshire Hathaway or give up 0.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Berkshire Hathaway vs. Blackstone Group
Performance |
| Timeline |
| Berkshire Hathaway |
| Blackstone Group |
Berkshire Hathaway and Blackstone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berkshire Hathaway and Blackstone
The main advantage of trading using opposite Berkshire Hathaway and Blackstone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Hathaway position performs unexpectedly, Blackstone 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 Blackstone will offset losses from the drop in Blackstone's long position.| Berkshire Hathaway vs. Stevia Nutra Corp | Berkshire Hathaway vs. Regent Ventures | Berkshire Hathaway vs. Element Global | Berkshire Hathaway vs. Affiliated Resources Corp |
| Blackstone vs. T Rowe Price | Blackstone vs. State Street Corp | Blackstone vs. KKR Co LP | Blackstone vs. Brookfield Asset Management |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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