Correlation Between Berkshire Hathaway and ShaMaran Petroleum
Can any of the company-specific risk be diversified away by investing in both Berkshire Hathaway and ShaMaran Petroleum 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 ShaMaran Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berkshire Hathaway and ShaMaran Petroleum Corp, you can compare the effects of market volatilities on Berkshire Hathaway and ShaMaran Petroleum 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 ShaMaran Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hathaway and ShaMaran Petroleum.
Diversification Opportunities for Berkshire Hathaway and ShaMaran Petroleum
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Berkshire and ShaMaran is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hathaway and ShaMaran Petroleum Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ShaMaran Petroleum Corp 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 ShaMaran Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ShaMaran Petroleum Corp has no effect on the direction of Berkshire Hathaway i.e., Berkshire Hathaway and ShaMaran Petroleum go up and down completely randomly.
Pair Corralation between Berkshire Hathaway and ShaMaran Petroleum
Assuming the 90 days horizon Berkshire Hathaway is expected to under-perform the ShaMaran Petroleum. But the stock apears to be less risky and, when comparing its historical volatility, Berkshire Hathaway is 11.77 times less risky than ShaMaran Petroleum. The stock trades about -0.24 of its potential returns per unit of risk. The ShaMaran Petroleum Corp is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 7.00 in ShaMaran Petroleum Corp on September 17, 2024 and sell it today you would earn a total of 1.00 from holding ShaMaran Petroleum Corp or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Berkshire Hathaway vs. ShaMaran Petroleum Corp
Performance |
| Timeline |
| Berkshire Hathaway |
| ShaMaran Petroleum Corp |
Berkshire Hathaway and ShaMaran Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berkshire Hathaway and ShaMaran Petroleum
The main advantage of trading using opposite Berkshire Hathaway and ShaMaran Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Hathaway position performs unexpectedly, ShaMaran Petroleum 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 ShaMaran Petroleum will offset losses from the drop in ShaMaran Petroleum'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 |
| ShaMaran Petroleum vs. POSCO Holdings | ShaMaran Petroleum vs. Schweizerische Nationalbank | ShaMaran Petroleum vs. Berkshire Hathaway | ShaMaran Petroleum vs. Berkshire Hathaway |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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