Correlation Between Berkshire Hathaway and CCL Industries
Can any of the company-specific risk be diversified away by investing in both Berkshire Hathaway and CCL Industries 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 CCL Industries 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 CCL Industries, you can compare the effects of market volatilities on Berkshire Hathaway and CCL Industries 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 CCL Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hathaway and CCL Industries.
Diversification Opportunities for Berkshire Hathaway and CCL Industries
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Berkshire and CCL is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hathaway CDR and CCL Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CCL Industries 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 CCL Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CCL Industries has no effect on the direction of Berkshire Hathaway i.e., Berkshire Hathaway and CCL Industries go up and down completely randomly.
Pair Corralation between Berkshire Hathaway and CCL Industries
Assuming the 90 days trading horizon Berkshire Hathaway CDR is expected to generate 1.1 times more return on investment than CCL Industries. However, Berkshire Hathaway is 1.1 times more volatile than CCL Industries. It trades about 0.23 of its potential returns per unit of risk. CCL Industries is currently generating about -0.15 per unit of risk. If you would invest 3,406 in Berkshire Hathaway CDR on September 1, 2024 and sell it today you would earn a total of 249.00 from holding Berkshire Hathaway CDR or generate 7.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Berkshire Hathaway CDR vs. CCL Industries
Performance |
| Timeline |
| Berkshire Hathaway CDR |
| CCL Industries |
Berkshire Hathaway and CCL Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berkshire Hathaway and CCL Industries
The main advantage of trading using opposite Berkshire Hathaway and CCL Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Hathaway position performs unexpectedly, CCL Industries 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 CCL Industries will offset losses from the drop in CCL Industries' long position.| Berkshire Hathaway vs. Amazon CDR | Berkshire Hathaway vs. Apple Inc CDR | Berkshire Hathaway vs. Alphabet Inc CDR | Berkshire Hathaway vs. Walmart Inc CDR |
| CCL Industries vs. Stella Jones | CCL Industries vs. Gildan Activewear | CCL Industries vs. Toromont Industries | CCL Industries vs. Waste Connections |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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