Correlation Between Berkshire Hathaway and EVS Broadcast

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

By analyzing existing cross correlation between Berkshire Hathaway and EVS Broadcast Equipment, you can compare the effects of market volatilities on Berkshire Hathaway and EVS Broadcast 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 EVS Broadcast. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hathaway and EVS Broadcast.

Diversification Opportunities for Berkshire Hathaway and EVS Broadcast

0.0

Correlation Coefficient

Berkshire Hathaway  EVS Broadcast

Pay attention - limited upside

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

Pair Corralation between Berkshire Hathaway and EVS Broadcast

If you would invest  3,080  in EVS Broadcast Equipment on December 22, 2024 and sell it today you would earn a total of  740.00  from holding EVS Broadcast Equipment or generate 24.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Berkshire Hathaway  vs.  EVS Broadcast Equipment

Berkshire Hathaway

Risk-Adjusted Performance

Good

Over the last 90 days Berkshire Hathaway has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Berkshire Hathaway is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

EVS Broadcast Equipment

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in EVS Broadcast Equipment are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, EVS Broadcast unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Berkshire Hathaway and EVS Broadcast

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

The idea behind Berkshire Hathaway and EVS Broadcast Equipment 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.

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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.