Correlation Between CATCo Reinsurance and Berkshire Hathaway
Can any of the company-specific risk be diversified away by investing in both CATCo Reinsurance and Berkshire Hathaway 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 CATCo Reinsurance and Berkshire Hathaway into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CATCo Reinsurance Opportunities and Berkshire Hathaway, you can compare the effects of market volatilities on CATCo Reinsurance and Berkshire Hathaway 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 CATCo Reinsurance with a short position of Berkshire Hathaway. Check out your portfolio center. Please also check ongoing floating volatility patterns of CATCo Reinsurance and Berkshire Hathaway.
Diversification Opportunities for CATCo Reinsurance and Berkshire Hathaway
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CATCo and Berkshire is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding CATCo Reinsurance Opportunitie and Berkshire Hathaway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berkshire Hathaway and CATCo Reinsurance 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 CATCo Reinsurance Opportunities are associated (or correlated) with Berkshire Hathaway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Berkshire Hathaway has no effect on the direction of CATCo Reinsurance i.e., CATCo Reinsurance and Berkshire Hathaway go up and down completely randomly.
Pair Corralation between CATCo Reinsurance and Berkshire Hathaway
Assuming the 90 days trading horizon CATCo Reinsurance Opportunities is expected to generate 8.66 times more return on investment than Berkshire Hathaway. However, CATCo Reinsurance is 8.66 times more volatile than Berkshire Hathaway. It trades about 0.21 of its potential returns per unit of risk. Berkshire Hathaway is currently generating about 0.22 per unit of risk. If you would invest 2,500 in CATCo Reinsurance Opportunities on August 30, 2024 and sell it today you would earn a total of 1,250 from holding CATCo Reinsurance Opportunities or generate 50.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CATCo Reinsurance Opportunitie vs. Berkshire Hathaway
Performance |
| Timeline |
| CATCo Reinsurance |
| Berkshire Hathaway |
CATCo Reinsurance and Berkshire Hathaway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CATCo Reinsurance and Berkshire Hathaway
The main advantage of trading using opposite CATCo Reinsurance and Berkshire Hathaway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CATCo Reinsurance position performs unexpectedly, Berkshire Hathaway 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 Berkshire Hathaway will offset losses from the drop in Berkshire Hathaway's long position.| CATCo Reinsurance vs. Tungsten West PLC | CATCo Reinsurance vs. Argo Group Limited | CATCo Reinsurance vs. Hardide PLC | CATCo Reinsurance vs. Versarien PLC |
| Berkshire Hathaway vs. Qurate Retail Series | Berkshire Hathaway vs. Blackrock World Mining | Berkshire Hathaway vs. Anglo Asian Mining | Berkshire Hathaway vs. Hochschild Mining plc |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Global Correlations Find global opportunities by holding instruments from different markets |