Correlation Between BERKSHIRE and Encore Capital
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By analyzing existing cross correlation between BERKSHIRE HATHAWAY ENERGY and Encore Capital Group, you can compare the effects of market volatilities on BERKSHIRE and Encore Capital 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 with a short position of Encore Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of BERKSHIRE and Encore Capital.
Diversification Opportunities for BERKSHIRE and Encore Capital
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BERKSHIRE and Encore is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding BERKSHIRE HATHAWAY ENERGY and Encore Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Encore Capital Group and BERKSHIRE 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 ENERGY are associated (or correlated) with Encore Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Encore Capital Group has no effect on the direction of BERKSHIRE i.e., BERKSHIRE and Encore Capital go up and down completely randomly.
Pair Corralation between BERKSHIRE and Encore Capital
Assuming the 90 days trading horizon BERKSHIRE is expected to generate 1.1 times less return on investment than Encore Capital. But when comparing it to its historical volatility, BERKSHIRE HATHAWAY ENERGY is 1.46 times less risky than Encore Capital. It trades about 0.03 of its potential returns per unit of risk. Encore Capital Group is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 4,599 in Encore Capital Group on September 3, 2024 and sell it today you would earn a total of 325.00 from holding Encore Capital Group or generate 7.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 80.32% |
| Values | Daily Returns |
BERKSHIRE HATHAWAY ENERGY vs. Encore Capital Group
Performance |
| Timeline |
| BERKSHIRE HATHAWAY ENERGY |
| Encore Capital Group |
BERKSHIRE and Encore Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BERKSHIRE and Encore Capital
The main advantage of trading using opposite BERKSHIRE and Encore Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BERKSHIRE position performs unexpectedly, Encore Capital 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 Encore Capital will offset losses from the drop in Encore Capital's long position.| BERKSHIRE vs. Old Dominion Freight | BERKSHIRE vs. Asure Software | BERKSHIRE vs. Casio Computer Co | BERKSHIRE vs. Kaltura |
| Encore Capital vs. Guild Holdings Co | Encore Capital vs. Mr Cooper Group | Encore Capital vs. CNFinance Holdings | Encore Capital vs. Security National Financial |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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