Correlation Between Hartford Financial and BERKSHIRE HATHAWAY

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

By analyzing existing cross correlation between Hartford Financial Services and BERKSHIRE HATHAWAY INC, you can compare the effects of market volatilities on Hartford Financial 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 Hartford Financial with a short position of BERKSHIRE HATHAWAY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Financial and BERKSHIRE HATHAWAY.

Diversification Opportunities for Hartford Financial and BERKSHIRE HATHAWAY

0.0

Correlation Coefficient

Hartford Financial  BERKSHIRE HATHAWAY

Pay attention - limited upside

The 3 months correlation between Hartford and BERKSHIRE is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Hartford Financial Services and BERKSHIRE HATHAWAY INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BERKSHIRE HATHAWAY INC and Hartford Financial 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 Hartford Financial Services 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 INC has no effect on the direction of Hartford Financial i.e., Hartford Financial and BERKSHIRE HATHAWAY go up and down completely randomly.

Pair Corralation between Hartford Financial and BERKSHIRE HATHAWAY

If you would invest (100.00) in BERKSHIRE HATHAWAY INC on January 20, 2024 and sell it today you would earn a total of  100.00  from holding BERKSHIRE HATHAWAY INC or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Hartford Financial Services  vs.  BERKSHIRE HATHAWAY INC

Hartford Financial

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Hartford Financial Services are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent forward indicators, Hartford Financial reported solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Hartford Financial and BERKSHIRE HATHAWAY

The main advantage of trading using opposite Hartford Financial and BERKSHIRE HATHAWAY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Financial 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.

The idea behind Hartford Financial Services and BERKSHIRE HATHAWAY 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..