Correlation Between Berkshire Hathaway and Afluente Transmisso

Can any of the company-specific risk be diversified away by investing in both Berkshire Hathaway and Afluente Transmisso 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 Afluente Transmisso into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Berkshire Hathaway and Afluente Transmisso de, you can compare the effects of market volatilities on Berkshire Hathaway and Afluente Transmisso 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 Afluente Transmisso. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hathaway and Afluente Transmisso.

Diversification Opportunities for Berkshire Hathaway and Afluente Transmisso

-0.75

Correlation Coefficient

Berkshire Hathaway  Afluente Transmisso

Pay attention - limited upside

The 3 months correlation between Berkshire and Afluente is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hathaway and Afluente Transmisso de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Afluente Transmisso 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 Afluente Transmisso. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Afluente Transmisso has no effect on the direction of Berkshire Hathaway i.e., Berkshire Hathaway and Afluente Transmisso go up and down completely randomly.

Pair Corralation between Berkshire Hathaway and Afluente Transmisso

Assuming the 90 days trading horizon Berkshire Hathaway is expected to under-perform the Afluente Transmisso. But the stock apears to be less risky and, when comparing its historical volatility, Berkshire Hathaway is 4.05 times less risky than Afluente Transmisso. The stock trades about -0.2 of its potential returns per unit of risk. The Afluente Transmisso de is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  721.00  in Afluente Transmisso de on January 30, 2024 and sell it today you would earn a total of  28.00  from holding Afluente Transmisso de or generate 3.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Berkshire Hathaway  vs.  Afluente Transmisso de

Berkshire Hathaway

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Berkshire Hathaway are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Berkshire Hathaway may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Afluente Transmisso

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Afluente Transmisso de has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Afluente Transmisso is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Berkshire Hathaway and Afluente Transmisso

The main advantage of trading using opposite Berkshire Hathaway and Afluente Transmisso positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Hathaway position performs unexpectedly, Afluente Transmisso 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 Afluente Transmisso will offset losses from the drop in Afluente Transmisso's long position.

The idea behind Berkshire Hathaway and Afluente Transmisso de pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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.