Correlation Between Berkshire Hathaway and Croda International
Can any of the company-specific risk be diversified away by investing in both Berkshire Hathaway and Croda International 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 Croda International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berkshire Hathaway and Croda International PLC, you can compare the effects of market volatilities on Berkshire Hathaway and Croda International 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 Croda International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hathaway and Croda International.
Diversification Opportunities for Berkshire Hathaway and Croda International
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Berkshire and Croda is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hathaway and Croda International PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Croda International PLC 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 Croda International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Croda International PLC has no effect on the direction of Berkshire Hathaway i.e., Berkshire Hathaway and Croda International go up and down completely randomly.
Pair Corralation between Berkshire Hathaway and Croda International
Assuming the 90 days horizon Berkshire Hathaway is expected to generate 0.62 times more return on investment than Croda International. However, Berkshire Hathaway is 1.62 times less risky than Croda International. It trades about 0.14 of its potential returns per unit of risk. Croda International PLC is currently generating about -0.12 per unit of risk. If you would invest 45,849 in Berkshire Hathaway on August 29, 2024 and sell it today you would earn a total of 2,007 from holding Berkshire Hathaway or generate 4.38% 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 vs. Croda International PLC
Performance |
| Timeline |
| Berkshire Hathaway |
| Croda International PLC |
Berkshire Hathaway and Croda International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berkshire Hathaway and Croda International
The main advantage of trading using opposite Berkshire Hathaway and Croda International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Hathaway position performs unexpectedly, Croda International 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 Croda International will offset losses from the drop in Croda International's long position.| Berkshire Hathaway vs. American International Group | Berkshire Hathaway vs. Sun Life Financial | Berkshire Hathaway vs. Arch Capital Group | Berkshire Hathaway vs. Hartford Financial Services |
| Croda International vs. PPG Industries | Croda International vs. Ecolab Inc | Croda International vs. Sherwin Williams Co | Croda International vs. Air Products and |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |