Correlation Between Berkshire Hathaway and Tilray

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

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

Diversification Opportunities for Berkshire Hathaway and Tilray

-0.55

Correlation Coefficient

Berkshire Hathaway  Tilray

Excellent diversification

The 3 months correlation between Berkshire and Tilray is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hathaway CDR and Tilray Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tilray Inc 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 CDR are associated (or correlated) with Tilray. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tilray Inc has no effect on the direction of Berkshire Hathaway i.e., Berkshire Hathaway and Tilray go up and down completely randomly.

Pair Corralation between Berkshire Hathaway and Tilray

Assuming the 90 days trading horizon Berkshire Hathaway CDR is expected to under-perform the Tilray. But the stock apears to be less risky and, when comparing its historical volatility, Berkshire Hathaway CDR is 8.72 times less risky than Tilray. The stock trades about -0.2 of its potential returns per unit of risk. The Tilray Inc is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  59.00  in Tilray Inc on May 7, 2025 and sell it today you would earn a total of  29.00  from holding Tilray Inc or generate 49.15% return on investment over 90 days.

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

Berkshire Hathaway CDR  vs.  Tilray Inc

Berkshire Hathaway CDR

Risk-Adjusted Performance

Weakest

Over the last 90 days Berkshire Hathaway CDR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Tilray Inc

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Tilray Inc are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Tilray displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Berkshire Hathaway and Tilray

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

The idea behind Berkshire Hathaway CDR and Tilray 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.