Correlation Between Berkshire Hathaway and Acceleware
Can any of the company-specific risk be diversified away by investing in both Berkshire Hathaway and Acceleware 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 Acceleware into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berkshire Hathaway CDR and Acceleware, you can compare the effects of market volatilities on Berkshire Hathaway and Acceleware 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 Acceleware. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hathaway and Acceleware.
Diversification Opportunities for Berkshire Hathaway and Acceleware
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Berkshire and Acceleware is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hathaway CDR and Acceleware in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acceleware 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 CDR are associated (or correlated) with Acceleware. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acceleware has no effect on the direction of Berkshire Hathaway i.e., Berkshire Hathaway and Acceleware go up and down completely randomly.
Pair Corralation between Berkshire Hathaway and Acceleware
Assuming the 90 days trading horizon Berkshire Hathaway CDR is expected to under-perform the Acceleware. But the stock apears to be less risky and, when comparing its historical volatility, Berkshire Hathaway CDR is 5.85 times less risky than Acceleware. The stock trades about -0.08 of its potential returns per unit of risk. The Acceleware is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 12.00 in Acceleware on March 1, 2024 and sell it today you would earn a total of 0.00 from holding Acceleware or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Berkshire Hathaway CDR vs. Acceleware
Performance |
Timeline |
Berkshire Hathaway CDR |
Acceleware |
Berkshire Hathaway and Acceleware Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Berkshire Hathaway and Acceleware
The main advantage of trading using opposite Berkshire Hathaway and Acceleware positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Hathaway position performs unexpectedly, Acceleware 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 Acceleware will offset losses from the drop in Acceleware's long position.Berkshire Hathaway vs. NexPoint Hospitality Trust | Berkshire Hathaway vs. Liquid Meta Capital | Berkshire Hathaway vs. Winshear Gold Corp | Berkshire Hathaway vs. Wilmington Capital Management |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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