Correlation Between Berkshire Hathaway and Atacado SA
Can any of the company-specific risk be diversified away by investing in both Berkshire Hathaway and Atacado SA 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 Atacado SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berkshire Hathaway and Atacado SA, you can compare the effects of market volatilities on Berkshire Hathaway and Atacado SA 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 Atacado SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hathaway and Atacado SA.
Diversification Opportunities for Berkshire Hathaway and Atacado SA
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Berkshire and Atacado is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hathaway and Atacado SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atacado SA 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 Atacado SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atacado SA has no effect on the direction of Berkshire Hathaway i.e., Berkshire Hathaway and Atacado SA go up and down completely randomly.
Pair Corralation between Berkshire Hathaway and Atacado SA
Assuming the 90 days trading horizon Berkshire Hathaway is expected to generate 0.44 times more return on investment than Atacado SA. However, Berkshire Hathaway is 2.28 times less risky than Atacado SA. It trades about 0.08 of its potential returns per unit of risk. Atacado SA is currently generating about -0.15 per unit of risk. If you would invest 13,607 in Berkshire Hathaway on September 2, 2024 and sell it today you would earn a total of 874.00 from holding Berkshire Hathaway or generate 6.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Berkshire Hathaway vs. Atacado SA
Performance |
| Timeline |
| Berkshire Hathaway |
| Atacado SA |
Berkshire Hathaway and Atacado SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berkshire Hathaway and Atacado SA
The main advantage of trading using opposite Berkshire Hathaway and Atacado SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Hathaway position performs unexpectedly, Atacado SA 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 Atacado SA will offset losses from the drop in Atacado SA's long position.| Berkshire Hathaway vs. Unity Software | Berkshire Hathaway vs. CVS Health | Berkshire Hathaway vs. Apartment Investment and | Berkshire Hathaway vs. The Trade Desk |
| Atacado SA vs. Companhia Siderrgica Nacional | Atacado SA vs. Cyrela Brazil Realty | Atacado SA vs. Fras le SA | Atacado SA vs. Energisa SA |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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