Correlation Between Berkshire Hathaway and Cardinal Health,

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

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

Diversification Opportunities for Berkshire Hathaway and Cardinal Health,

0.17

Correlation Coefficient

Berkshire Hathaway  Cardinal Health,

Average diversification

The 3 months correlation between Berkshire and Cardinal is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hathaway and Cardinal Health, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardinal Health, 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 Cardinal Health,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cardinal Health, has no effect on the direction of Berkshire Hathaway i.e., Berkshire Hathaway and Cardinal Health, go up and down completely randomly.

Pair Corralation between Berkshire Hathaway and Cardinal Health,

Assuming the 90 days trading horizon Berkshire Hathaway is expected to generate 1.75 times less return on investment than Cardinal Health,. But when comparing it to its historical volatility, Berkshire Hathaway is 1.84 times less risky than Cardinal Health,. It trades about 0.18 of its potential returns per unit of risk. Cardinal Health, is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  63,682  in Cardinal Health, on October 8, 2024 and sell it today you would earn a total of  7,818  from holding Cardinal Health, or generate 12.28% return on investment over 90 days.

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

Berkshire Hathaway  vs.  Cardinal Health,

Berkshire Hathaway

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Berkshire Hathaway are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Berkshire Hathaway sustained solid returns over the last few months and may actually be approaching a breakup point.

Cardinal Health,

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cardinal Health, are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Cardinal Health, sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Berkshire Hathaway and Cardinal Health,

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

The idea behind Berkshire Hathaway and Cardinal Health, 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.