Correlation Between CREO MEDICAL and Berkshire Hathaway

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

By analyzing existing cross correlation between CREO MEDICAL GRP and Berkshire Hathaway, you can compare the effects of market volatilities on CREO MEDICAL 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 CREO MEDICAL with a short position of Berkshire Hathaway. Check out your portfolio center. Please also check ongoing floating volatility patterns of CREO MEDICAL and Berkshire Hathaway.

Diversification Opportunities for CREO MEDICAL and Berkshire Hathaway

-0.58

Correlation Coefficient

CREO MEDICAL  Berkshire Hathaway

Excellent diversification

The 3 months correlation between CREO and Berkshire is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding CREO MEDICAL GRP and Berkshire Hathaway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berkshire Hathaway and CREO MEDICAL 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 CREO MEDICAL GRP 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 has no effect on the direction of CREO MEDICAL i.e., CREO MEDICAL and Berkshire Hathaway go up and down completely randomly.

Pair Corralation between CREO MEDICAL and Berkshire Hathaway

Assuming the 90 days horizon CREO MEDICAL GRP is expected to under-perform the Berkshire Hathaway. In addition to that, CREO MEDICAL is 3.24 times more volatile than Berkshire Hathaway. It trades about -0.03 of its total potential returns per unit of risk. Berkshire Hathaway is currently generating about 0.06 per unit of volatility. If you would invest  42,095  in Berkshire Hathaway on October 25, 2024 and sell it today you would earn a total of  1,850  from holding Berkshire Hathaway or generate 4.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

CREO MEDICAL GRP  vs.  Berkshire Hathaway

CREO MEDICAL GRP

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CREO MEDICAL GRP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Berkshire Hathaway

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Berkshire Hathaway are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Berkshire Hathaway is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with CREO MEDICAL and Berkshire Hathaway

The main advantage of trading using opposite CREO MEDICAL and Berkshire Hathaway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CREO MEDICAL 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 CREO MEDICAL GRP and Berkshire Hathaway 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.