Correlation Between Berkshire Hathaway and Brookfield Infrastructure
Can any of the company-specific risk be diversified away by investing in both Berkshire Hathaway and Brookfield Infrastructure 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 Brookfield Infrastructure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berkshire Hathaway CDR and Brookfield Infrastructure Partners, you can compare the effects of market volatilities on Berkshire Hathaway and Brookfield Infrastructure 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 Brookfield Infrastructure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hathaway and Brookfield Infrastructure.
Diversification Opportunities for Berkshire Hathaway and Brookfield Infrastructure
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Berkshire and Brookfield is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hathaway CDR and Brookfield Infrastructure Part in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Infrastructure 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 CDR are associated (or correlated) with Brookfield Infrastructure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookfield Infrastructure has no effect on the direction of Berkshire Hathaway i.e., Berkshire Hathaway and Brookfield Infrastructure go up and down completely randomly.
Pair Corralation between Berkshire Hathaway and Brookfield Infrastructure
Assuming the 90 days trading horizon Berkshire Hathaway is expected to generate 1.02 times less return on investment than Brookfield Infrastructure. But when comparing it to its historical volatility, Berkshire Hathaway CDR is 1.01 times less risky than Brookfield Infrastructure. It trades about 0.11 of its potential returns per unit of risk. Brookfield Infrastructure Partners is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,849 in Brookfield Infrastructure Partners on September 12, 2024 and sell it today you would earn a total of 504.00 from holding Brookfield Infrastructure Partners or generate 27.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Berkshire Hathaway CDR vs. Brookfield Infrastructure Part
Performance |
| Timeline |
| Berkshire Hathaway CDR |
| Brookfield Infrastructure |
Berkshire Hathaway and Brookfield Infrastructure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berkshire Hathaway and Brookfield Infrastructure
The main advantage of trading using opposite Berkshire Hathaway and Brookfield Infrastructure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Hathaway position performs unexpectedly, Brookfield Infrastructure 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 Brookfield Infrastructure will offset losses from the drop in Brookfield Infrastructure's long position.| Berkshire Hathaway vs. Broadcom | Berkshire Hathaway vs. Forsys Metals Corp | Berkshire Hathaway vs. Lion One Metals | Berkshire Hathaway vs. NeXGold Mining Corp |
| Brookfield Infrastructure vs. Microsoft Corp CDR | Brookfield Infrastructure vs. Apple Inc CDR | Brookfield Infrastructure vs. Alphabet Inc CDR | Brookfield Infrastructure vs. Amazon CDR |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |