Correlation Between Allianz SE and Berkshire Hathaway
Can any of the company-specific risk be diversified away by investing in both Allianz SE 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 Allianz SE and Berkshire Hathaway into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allianz SE and Berkshire Hathaway, you can compare the effects of market volatilities on Allianz SE 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 Allianz SE with a short position of Berkshire Hathaway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allianz SE and Berkshire Hathaway.
Diversification Opportunities for Allianz SE and Berkshire Hathaway
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Allianz and Berkshire is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Allianz SE and Berkshire Hathaway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berkshire Hathaway and Allianz SE 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 Allianz SE 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 Allianz SE i.e., Allianz SE and Berkshire Hathaway go up and down completely randomly.
Pair Corralation between Allianz SE and Berkshire Hathaway
Assuming the 90 days horizon Allianz SE is expected to under-perform the Berkshire Hathaway. In addition to that, Allianz SE is 1.1 times more volatile than Berkshire Hathaway. It trades about -0.08 of its total potential returns per unit of risk. Berkshire Hathaway is currently generating about 0.08 per unit of volatility. If you would invest 69,122,000 in Berkshire Hathaway on August 24, 2024 and sell it today you would earn a total of 1,603,000 from holding Berkshire Hathaway or generate 2.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Allianz SE vs. Berkshire Hathaway
Performance |
| Timeline |
| Allianz SE |
| Berkshire Hathaway |
Allianz SE and Berkshire Hathaway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allianz SE and Berkshire Hathaway
The main advantage of trading using opposite Allianz SE and Berkshire Hathaway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allianz SE 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.| Allianz SE vs. Assicurazioni Generali SpA | Allianz SE vs. ageas SANV | Allianz SE vs. AXA SA | Allianz SE vs. Sampo OYJ |
| Berkshire Hathaway vs. American International Group | Berkshire Hathaway vs. Arch Capital Group | Berkshire Hathaway vs. Sun Life Financial | Berkshire Hathaway vs. Hartford Financial Services |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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