Correlation Between Berkshire Hathaway and CGX Energy
Can any of the company-specific risk be diversified away by investing in both Berkshire Hathaway and CGX Energy 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 CGX Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berkshire Hathaway and CGX Energy, you can compare the effects of market volatilities on Berkshire Hathaway and CGX Energy 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 CGX Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hathaway and CGX Energy.
Diversification Opportunities for Berkshire Hathaway and CGX Energy
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Berkshire and CGX is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hathaway and CGX Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CGX Energy 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 CGX Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CGX Energy has no effect on the direction of Berkshire Hathaway i.e., Berkshire Hathaway and CGX Energy go up and down completely randomly.
Pair Corralation between Berkshire Hathaway and CGX Energy
Assuming the 90 days horizon Berkshire Hathaway is expected to generate 0.09 times more return on investment than CGX Energy. However, Berkshire Hathaway is 11.2 times less risky than CGX Energy. It trades about -0.25 of its potential returns per unit of risk. CGX Energy is currently generating about -0.11 per unit of risk. If you would invest 70,800,000 in Berkshire Hathaway on September 19, 2024 and sell it today you would lose (2,388,000) from holding Berkshire Hathaway or give up 3.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Berkshire Hathaway vs. CGX Energy
Performance |
| Timeline |
| Berkshire Hathaway |
| CGX Energy |
Berkshire Hathaway and CGX Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berkshire Hathaway and CGX Energy
The main advantage of trading using opposite Berkshire Hathaway and CGX Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Hathaway position performs unexpectedly, CGX Energy 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 CGX Energy will offset losses from the drop in CGX Energy's long position.| Berkshire Hathaway vs. American International Group | Berkshire Hathaway vs. Arch Capital Group | Berkshire Hathaway vs. Sun Life Financial | Berkshire Hathaway vs. Hartford Financial Services |
| CGX Energy vs. Avanti Energy | CGX Energy vs. Desert Mountain Energy | CGX Energy vs. Royal Helium | CGX Energy vs. Eco Oil Gas |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |