Correlation Between Berkshire Hathaway and Entourage Health

Can any of the company-specific risk be diversified away by investing in both Berkshire Hathaway and Entourage 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 Entourage 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 Entourage Health Corp, you can compare the effects of market volatilities on Berkshire Hathaway and Entourage 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 Entourage Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hathaway and Entourage Health.

Diversification Opportunities for Berkshire Hathaway and Entourage Health

-0.45

Correlation Coefficient

Berkshire Hathaway  Entourage Health

Very good diversification

The 3 months correlation between Berkshire and Entourage is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hathaway and Entourage Health Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entourage Health Corp 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 Entourage Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entourage Health Corp has no effect on the direction of Berkshire Hathaway i.e., Berkshire Hathaway and Entourage Health go up and down completely randomly.

Pair Corralation between Berkshire Hathaway and Entourage Health

Assuming the 90 days horizon Berkshire Hathaway is expected to generate 0.08 times more return on investment than Entourage Health. However, Berkshire Hathaway is 12.02 times less risky than Entourage Health. It trades about 0.12 of its potential returns per unit of risk. Entourage Health Corp is currently generating about -0.06 per unit of risk. If you would invest  47,733  in Berkshire Hathaway on December 2, 2024 and sell it today you would earn a total of  3,650  from holding Berkshire Hathaway or generate 7.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Berkshire Hathaway  vs.  Entourage Health Corp

Berkshire Hathaway

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Berkshire Hathaway are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile basic indicators, Berkshire Hathaway may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Entourage Health Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Entourage Health Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Berkshire Hathaway and Entourage Health

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

The idea behind Berkshire Hathaway and Entourage Health Corp 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.