Correlation Between Berkshire Hathaway and So Carlos
Can any of the company-specific risk be diversified away by investing in both Berkshire Hathaway and So Carlos 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 So Carlos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berkshire Hathaway and So Carlos Empreendimentos, you can compare the effects of market volatilities on Berkshire Hathaway and So Carlos 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 So Carlos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hathaway and So Carlos.
Diversification Opportunities for Berkshire Hathaway and So Carlos
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Berkshire and SCAR3 is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hathaway and So Carlos Empreendimentos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on So Carlos Empreendimentos 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 So Carlos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of So Carlos Empreendimentos has no effect on the direction of Berkshire Hathaway i.e., Berkshire Hathaway and So Carlos go up and down completely randomly.
Pair Corralation between Berkshire Hathaway and So Carlos
Assuming the 90 days trading horizon Berkshire Hathaway is expected to generate 0.53 times more return on investment than So Carlos. However, Berkshire Hathaway is 1.9 times less risky than So Carlos. It trades about 0.18 of its potential returns per unit of risk. So Carlos Empreendimentos is currently generating about -0.02 per unit of risk. If you would invest 8,443 in Berkshire Hathaway on September 1, 2024 and sell it today you would earn a total of 6,038 from holding Berkshire Hathaway or generate 71.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
Berkshire Hathaway vs. So Carlos Empreendimentos
Performance |
| Timeline |
| Berkshire Hathaway |
| So Carlos Empreendimentos |
Berkshire Hathaway and So Carlos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berkshire Hathaway and So Carlos
The main advantage of trading using opposite Berkshire Hathaway and So Carlos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Hathaway position performs unexpectedly, So Carlos 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 So Carlos will offset losses from the drop in So Carlos' long position.| Berkshire Hathaway vs. METISA Metalrgica Timboense | Berkshire Hathaway vs. Bemobi Mobile Tech | Berkshire Hathaway vs. Zoom Video Communications | Berkshire Hathaway vs. Metalrgica Riosulense SA |
| So Carlos vs. EZTEC Empreendimentos e | So Carlos vs. PBG SA | So Carlos vs. LPS Brasil | So Carlos vs. Tecnisa 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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