Correlation Between Berkshire Hathaway and Teleperformance
Can any of the company-specific risk be diversified away by investing in both Berkshire Hathaway and Teleperformance 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 Teleperformance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berkshire Hathaway and Teleperformance PK, you can compare the effects of market volatilities on Berkshire Hathaway and Teleperformance 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 Teleperformance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hathaway and Teleperformance.
Diversification Opportunities for Berkshire Hathaway and Teleperformance
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Berkshire and Teleperformance is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hathaway and Teleperformance PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teleperformance PK 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 Teleperformance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teleperformance PK has no effect on the direction of Berkshire Hathaway i.e., Berkshire Hathaway and Teleperformance go up and down completely randomly.
Pair Corralation between Berkshire Hathaway and Teleperformance
Assuming the 90 days horizon Berkshire Hathaway is expected to generate 0.43 times more return on investment than Teleperformance. However, Berkshire Hathaway is 2.33 times less risky than Teleperformance. It trades about 0.1 of its potential returns per unit of risk. Teleperformance PK is currently generating about -0.12 per unit of risk. If you would invest 45,747 in Berkshire Hathaway on August 28, 2024 and sell it today you would earn a total of 2,109 from holding Berkshire Hathaway or generate 4.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Berkshire Hathaway vs. Teleperformance PK
Performance |
| Timeline |
| Berkshire Hathaway |
| Teleperformance PK |
Berkshire Hathaway and Teleperformance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berkshire Hathaway and Teleperformance
The main advantage of trading using opposite Berkshire Hathaway and Teleperformance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Hathaway position performs unexpectedly, Teleperformance 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 Teleperformance will offset losses from the drop in Teleperformance'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 |
| Teleperformance vs. Dexterra Group | Teleperformance vs. Intertek Group Plc | Teleperformance vs. Wildpack Beverage | Teleperformance vs. DATA Communications Management |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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