Correlation Between Berkshire Hathaway and Vibra Energia
Can any of the company-specific risk be diversified away by investing in both Berkshire Hathaway and Vibra Energia 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 Vibra Energia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berkshire Hathaway and Vibra Energia SA, you can compare the effects of market volatilities on Berkshire Hathaway and Vibra Energia 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 Vibra Energia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hathaway and Vibra Energia.
Diversification Opportunities for Berkshire Hathaway and Vibra Energia
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Berkshire and Vibra is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hathaway and Vibra Energia SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vibra Energia 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 Vibra Energia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vibra Energia SA has no effect on the direction of Berkshire Hathaway i.e., Berkshire Hathaway and Vibra Energia go up and down completely randomly.
Pair Corralation between Berkshire Hathaway and Vibra Energia
Assuming the 90 days trading horizon Berkshire Hathaway is expected to generate 0.71 times more return on investment than Vibra Energia. However, Berkshire Hathaway is 1.41 times less risky than Vibra Energia. It trades about 0.18 of its potential returns per unit of risk. Vibra Energia SA is currently generating about 0.01 per unit of risk. If you would invest 8,691 in Berkshire Hathaway on September 3, 2024 and sell it today you would earn a total of 5,790 from holding Berkshire Hathaway or generate 66.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
Berkshire Hathaway vs. Vibra Energia SA
Performance |
| Timeline |
| Berkshire Hathaway |
| Vibra Energia SA |
Berkshire Hathaway and Vibra Energia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berkshire Hathaway and Vibra Energia
The main advantage of trading using opposite Berkshire Hathaway and Vibra Energia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Hathaway position performs unexpectedly, Vibra Energia 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 Vibra Energia will offset losses from the drop in Vibra Energia's long position.| Berkshire Hathaway vs. Porto Seguro SA | Berkshire Hathaway vs. Energisa SA | Berkshire Hathaway vs. BTG Pactual Logstica | Berkshire Hathaway vs. Plano Plano Desenvolvimento |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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