Correlation Between Assicurazioni Generali and Berkshire Hathaway
Can any of the company-specific risk be diversified away by investing in both Assicurazioni Generali 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 Assicurazioni Generali and Berkshire Hathaway into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Assicurazioni Generali SpA and Berkshire Hathaway, you can compare the effects of market volatilities on Assicurazioni Generali 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 Assicurazioni Generali with a short position of Berkshire Hathaway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Assicurazioni Generali and Berkshire Hathaway.
Diversification Opportunities for Assicurazioni Generali and Berkshire Hathaway
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Assicurazioni and Berkshire is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Assicurazioni Generali SpA and Berkshire Hathaway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berkshire Hathaway and Assicurazioni Generali 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 Assicurazioni Generali SpA 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 Assicurazioni Generali i.e., Assicurazioni Generali and Berkshire Hathaway go up and down completely randomly.
Pair Corralation between Assicurazioni Generali and Berkshire Hathaway
Assuming the 90 days horizon Assicurazioni Generali is expected to generate 339.0 times less return on investment than Berkshire Hathaway. But when comparing it to its historical volatility, Assicurazioni Generali SpA is 106.27 times less risky than Berkshire Hathaway. It trades about 0.05 of its potential returns per unit of risk. Berkshire Hathaway is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 63,900,000 in Berkshire Hathaway on September 23, 2024 and sell it today you would earn a total of 850,000 from holding Berkshire Hathaway or generate 1.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Assicurazioni Generali SpA vs. Berkshire Hathaway
Performance |
| Timeline |
| Assicurazioni Generali |
| Berkshire Hathaway |
Assicurazioni Generali and Berkshire Hathaway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Assicurazioni Generali and Berkshire Hathaway
The main advantage of trading using opposite Assicurazioni Generali and Berkshire Hathaway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Assicurazioni Generali 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.| Assicurazioni Generali vs. Berkshire Hathaway | Assicurazioni Generali vs. Berkshire Hathaway | Assicurazioni Generali vs. Zurich Insurance Group | Assicurazioni Generali vs. American International Group |
| Berkshire Hathaway vs. Berkshire Hathaway | Berkshire Hathaway vs. Zurich Insurance Group | Berkshire Hathaway vs. American International Group | Berkshire Hathaway vs. Assicurazioni Generali SpA |
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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