Correlation Between Berkshire Hathaway and Teck Resources
Can any of the company-specific risk be diversified away by investing in both Berkshire Hathaway and Teck Resources 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 Teck Resources 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 Teck Resources Limited, you can compare the effects of market volatilities on Berkshire Hathaway and Teck Resources 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 Teck Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hathaway and Teck Resources.
Diversification Opportunities for Berkshire Hathaway and Teck Resources
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Berkshire and Teck is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hathaway CDR and Teck Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teck Resources 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 Teck Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teck Resources has no effect on the direction of Berkshire Hathaway i.e., Berkshire Hathaway and Teck Resources go up and down completely randomly.
Pair Corralation between Berkshire Hathaway and Teck Resources
Assuming the 90 days trading horizon Berkshire Hathaway CDR is expected to generate 0.54 times more return on investment than Teck Resources. However, Berkshire Hathaway CDR is 1.86 times less risky than Teck Resources. It trades about 0.17 of its potential returns per unit of risk. Teck Resources Limited is currently generating about -0.09 per unit of risk. If you would invest 3,530 in Berkshire Hathaway CDR on November 22, 2024 and sell it today you would earn a total of 106.00 from holding Berkshire Hathaway CDR or generate 3.0% 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. Teck Resources Limited
Performance |
| Timeline |
| Berkshire Hathaway CDR |
| Teck Resources |
Berkshire Hathaway and Teck Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berkshire Hathaway and Teck Resources
The main advantage of trading using opposite Berkshire Hathaway and Teck Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Hathaway position performs unexpectedly, Teck Resources 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 Teck Resources will offset losses from the drop in Teck Resources' long position.| Berkshire Hathaway vs. Partners Value Investments | Berkshire Hathaway vs. Canadian General Investments | Berkshire Hathaway vs. Western Investment | Berkshire Hathaway vs. Economic Investment Trust |
| Teck Resources vs. First Quantum Minerals | Teck Resources vs. Nutrien | Teck Resources vs. Lundin Mining | Teck Resources vs. Wheaton Precious Metals |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |