Correlation Between Berkshire Hathaway and Silvercorp Metals
Can any of the company-specific risk be diversified away by investing in both Berkshire Hathaway and Silvercorp Metals 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 Silvercorp Metals 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 Silvercorp Metals, you can compare the effects of market volatilities on Berkshire Hathaway and Silvercorp Metals 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 Silvercorp Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hathaway and Silvercorp Metals.
Diversification Opportunities for Berkshire Hathaway and Silvercorp Metals
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Berkshire and Silvercorp is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hathaway CDR and Silvercorp Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silvercorp Metals 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 Silvercorp Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silvercorp Metals has no effect on the direction of Berkshire Hathaway i.e., Berkshire Hathaway and Silvercorp Metals go up and down completely randomly.
Pair Corralation between Berkshire Hathaway and Silvercorp Metals
Assuming the 90 days trading horizon Berkshire Hathaway CDR is expected to generate 0.28 times more return on investment than Silvercorp Metals. However, Berkshire Hathaway CDR is 3.55 times less risky than Silvercorp Metals. It trades about 0.12 of its potential returns per unit of risk. Silvercorp Metals is currently generating about 0.01 per unit of risk. If you would invest 2,469 in Berkshire Hathaway CDR on August 26, 2024 and sell it today you would earn a total of 1,131 from holding Berkshire Hathaway CDR or generate 45.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Berkshire Hathaway CDR vs. Silvercorp Metals
Performance |
| Timeline |
| Berkshire Hathaway CDR |
| Silvercorp Metals |
Berkshire Hathaway and Silvercorp Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berkshire Hathaway and Silvercorp Metals
The main advantage of trading using opposite Berkshire Hathaway and Silvercorp Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Hathaway position performs unexpectedly, Silvercorp Metals 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 Silvercorp Metals will offset losses from the drop in Silvercorp Metals' long position.| Berkshire Hathaway vs. NVIDIA CDR | Berkshire Hathaway vs. Apple Inc CDR | Berkshire Hathaway vs. Microsoft Corp CDR | Berkshire Hathaway vs. Amazon CDR |
| Silvercorp Metals vs. First Majestic Silver | Silvercorp Metals vs. Ivanhoe Energy | Silvercorp Metals vs. Orezone Gold Corp | Silvercorp Metals vs. Faraday Copper Corp |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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