Correlation Between Berkshire Hathaway and Grupo Profuturo

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

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

Diversification Opportunities for Berkshire Hathaway and Grupo Profuturo

-0.06

Correlation Coefficient

Berkshire Hathaway  Grupo Profuturo

Good diversification

The 3 months correlation between Berkshire and Grupo is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hathaway and Grupo Profuturo SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Profuturo SAB 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 Grupo Profuturo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Profuturo SAB has no effect on the direction of Berkshire Hathaway i.e., Berkshire Hathaway and Grupo Profuturo go up and down completely randomly.

Pair Corralation between Berkshire Hathaway and Grupo Profuturo

Assuming the 90 days trading horizon Berkshire Hathaway is expected to generate 1.26 times less return on investment than Grupo Profuturo. In addition to that, Berkshire Hathaway is 1.12 times more volatile than Grupo Profuturo SAB. It trades about 0.23 of its total potential returns per unit of risk. Grupo Profuturo SAB is currently generating about 0.32 per unit of volatility. If you would invest  10,000  in Grupo Profuturo SAB on October 23, 2024 and sell it today you would earn a total of  814.00  from holding Grupo Profuturo SAB or generate 8.14% return on investment over 90 days.

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

Berkshire Hathaway  vs.  Grupo Profuturo SAB

Berkshire Hathaway

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Berkshire Hathaway are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Berkshire Hathaway may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Grupo Profuturo SAB

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Grupo Profuturo SAB are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Grupo Profuturo unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Berkshire Hathaway and Grupo Profuturo

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

The idea behind Berkshire Hathaway and Grupo Profuturo SAB 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.

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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.