Correlation Between Berkshire Hathaway and Banco Bilbao
Can any of the company-specific risk be diversified away by investing in both Berkshire Hathaway and Banco Bilbao 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 Banco Bilbao into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berkshire Hathaway and Banco Bilbao Vizcaya, you can compare the effects of market volatilities on Berkshire Hathaway and Banco Bilbao 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 Banco Bilbao. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hathaway and Banco Bilbao.
Diversification Opportunities for Berkshire Hathaway and Banco Bilbao
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Berkshire and Banco is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hathaway and Banco Bilbao Vizcaya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Bilbao Vizcaya 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 Banco Bilbao. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco Bilbao Vizcaya has no effect on the direction of Berkshire Hathaway i.e., Berkshire Hathaway and Banco Bilbao go up and down completely randomly.
Pair Corralation between Berkshire Hathaway and Banco Bilbao
Assuming the 90 days trading horizon Berkshire Hathaway is expected to generate 0.81 times more return on investment than Banco Bilbao. However, Berkshire Hathaway is 1.23 times less risky than Banco Bilbao. It trades about 0.19 of its potential returns per unit of risk. Banco Bilbao Vizcaya is currently generating about -0.08 per unit of risk. If you would invest 918,900 in Berkshire Hathaway on September 2, 2024 and sell it today you would earn a total of 66,100 from holding Berkshire Hathaway or generate 7.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Berkshire Hathaway vs. Banco Bilbao Vizcaya
Performance |
| Timeline |
| Berkshire Hathaway |
| Banco Bilbao Vizcaya |
Berkshire Hathaway and Banco Bilbao Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berkshire Hathaway and Banco Bilbao
The main advantage of trading using opposite Berkshire Hathaway and Banco Bilbao positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Hathaway position performs unexpectedly, Banco Bilbao 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 Banco Bilbao will offset losses from the drop in Banco Bilbao's long position.| Berkshire Hathaway vs. FibraHotel | Berkshire Hathaway vs. Martin Marietta Materials | Berkshire Hathaway vs. Prudential Financial | Berkshire Hathaway vs. Southern Copper |
| Banco Bilbao vs. FibraHotel | Banco Bilbao vs. GMxico Transportes SAB | Banco Bilbao vs. Cognizant Technology Solutions | Banco Bilbao vs. Grupo Carso SAB |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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