Correlation Between Berkshire Hathaway and SGS SA
Can any of the company-specific risk be diversified away by investing in both Berkshire Hathaway and SGS SA 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 SGS SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berkshire Hathaway and SGS SA, you can compare the effects of market volatilities on Berkshire Hathaway and SGS SA 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 SGS SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hathaway and SGS SA.
Diversification Opportunities for Berkshire Hathaway and SGS SA
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Berkshire and SGS is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hathaway and SGS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SGS SA 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 SGS SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SGS SA has no effect on the direction of Berkshire Hathaway i.e., Berkshire Hathaway and SGS SA go up and down completely randomly.
Pair Corralation between Berkshire Hathaway and SGS SA
Assuming the 90 days horizon Berkshire Hathaway is expected to generate 0.91 times more return on investment than SGS SA. However, Berkshire Hathaway is 1.1 times less risky than SGS SA. It trades about 0.19 of its potential returns per unit of risk. SGS SA is currently generating about -0.2 per unit of risk. If you would invest 68,260,000 in Berkshire Hathaway on August 31, 2024 and sell it today you would earn a total of 4,094,900 from holding Berkshire Hathaway or generate 6.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Berkshire Hathaway vs. SGS SA
Performance |
| Timeline |
| Berkshire Hathaway |
| SGS SA |
Berkshire Hathaway and SGS SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berkshire Hathaway and SGS SA
The main advantage of trading using opposite Berkshire Hathaway and SGS SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Hathaway position performs unexpectedly, SGS SA 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 SGS SA will offset losses from the drop in SGS SA'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 |
| SGS SA vs. Daniels Corporate Advisory | SGS SA vs. AimRite Holdings Corp | SGS SA vs. Sack Lunch Productions | SGS SA vs. Dalrada Financial Corp |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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