Correlation Between BERKSHIRE HATHAWAY and Altaba

Can any of the company-specific risk be diversified away by investing in both BERKSHIRE HATHAWAY and Altaba 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 Altaba into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BERKSHIRE HATHAWAY INC and Altaba Inc, you can compare the effects of market volatilities on BERKSHIRE HATHAWAY and Altaba 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 Altaba. Check out your portfolio center. Please also check ongoing floating volatility patterns of BERKSHIRE HATHAWAY and Altaba.

Diversification Opportunities for BERKSHIRE HATHAWAY and Altaba

0.0

Correlation Coefficient

BERKSHIRE HATHAWAY  Altaba

Pay attention - limited upside

The 3 months correlation between BERKSHIRE and Altaba is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BERKSHIRE HATHAWAY INC and Altaba Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altaba Inc 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 INC are associated (or correlated) with Altaba. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altaba Inc has no effect on the direction of BERKSHIRE HATHAWAY i.e., BERKSHIRE HATHAWAY and Altaba go up and down completely randomly.

Pair Corralation between BERKSHIRE HATHAWAY and Altaba

If you would invest (100.00) in Altaba Inc on February 7, 2024 and sell it today you would earn a total of  100.00  from holding Altaba Inc or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

BERKSHIRE HATHAWAY INC  vs.  Altaba Inc

BERKSHIRE HATHAWAY INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BERKSHIRE HATHAWAY INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, BERKSHIRE HATHAWAY is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Altaba Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Altaba Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Altaba is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with BERKSHIRE HATHAWAY and Altaba

The main advantage of trading using opposite BERKSHIRE HATHAWAY and Altaba positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BERKSHIRE HATHAWAY position performs unexpectedly, Altaba 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 Altaba will offset losses from the drop in Altaba's long position.

The idea behind BERKSHIRE HATHAWAY INC and Altaba Inc 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.

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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.