Correlation Between CMR SAB and Berkshire Hathaway
Can any of the company-specific risk be diversified away by investing in both CMR SAB 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 CMR SAB and Berkshire Hathaway into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CMR SAB de and Berkshire Hathaway, you can compare the effects of market volatilities on CMR SAB 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 CMR SAB with a short position of Berkshire Hathaway. Check out your portfolio center. Please also check ongoing floating volatility patterns of CMR SAB and Berkshire Hathaway.
Diversification Opportunities for CMR SAB and Berkshire Hathaway
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between CMR and Berkshire is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding CMR SAB de and Berkshire Hathaway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berkshire Hathaway and CMR SAB 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 CMR SAB de 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 CMR SAB i.e., CMR SAB and Berkshire Hathaway go up and down completely randomly.
Pair Corralation between CMR SAB and Berkshire Hathaway
Assuming the 90 days trading horizon CMR SAB de is expected to generate 3.56 times more return on investment than Berkshire Hathaway. However, CMR SAB is 3.56 times more volatile than Berkshire Hathaway. It trades about 0.07 of its potential returns per unit of risk. Berkshire Hathaway is currently generating about 0.02 per unit of risk. If you would invest 117.00 in CMR SAB de on November 2, 2024 and sell it today you would earn a total of 28.00 from holding CMR SAB de or generate 23.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.03% |
| Values | Daily Returns |
CMR SAB de vs. Berkshire Hathaway
Performance |
| Timeline |
| CMR SAB de |
| Berkshire Hathaway |
CMR SAB and Berkshire Hathaway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CMR SAB and Berkshire Hathaway
The main advantage of trading using opposite CMR SAB and Berkshire Hathaway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CMR SAB 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.| CMR SAB vs. Desarrolladora Homex SAB | CMR SAB vs. Axtel SAB de | CMR SAB vs. Organizacin Soriana S | CMR SAB vs. Kimberly Clark de Mxico |
| Berkshire Hathaway vs. Ameriprise Financial | Berkshire Hathaway vs. Barclays PLC | Berkshire Hathaway vs. Caterpillar | Berkshire Hathaway vs. Grupo Profuturo 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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