Correlation Between Berkshire Hathaway and San Juan
Can any of the company-specific risk be diversified away by investing in both Berkshire Hathaway and San Juan 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 San Juan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berkshire Hathaway and San Juan Basin, you can compare the effects of market volatilities on Berkshire Hathaway and San Juan 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 San Juan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hathaway and San Juan.
Diversification Opportunities for Berkshire Hathaway and San Juan
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Berkshire and San is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hathaway and San Juan Basin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on San Juan Basin 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 San Juan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of San Juan Basin has no effect on the direction of Berkshire Hathaway i.e., Berkshire Hathaway and San Juan go up and down completely randomly.
Pair Corralation between Berkshire Hathaway and San Juan
Assuming the 90 days horizon Berkshire Hathaway is expected to under-perform the San Juan. But the stock apears to be less risky and, when comparing its historical volatility, Berkshire Hathaway is 4.97 times less risky than San Juan. The stock trades about -0.1 of its potential returns per unit of risk. The San Juan Basin is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 401.00 in San Juan Basin on September 13, 2024 and sell it today you would earn a total of 14.00 from holding San Juan Basin or generate 3.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Berkshire Hathaway vs. San Juan Basin
Performance |
| Timeline |
| Berkshire Hathaway |
| San Juan Basin |
Berkshire Hathaway and San Juan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berkshire Hathaway and San Juan
The main advantage of trading using opposite Berkshire Hathaway and San Juan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Hathaway position performs unexpectedly, San Juan 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 San Juan will offset losses from the drop in San Juan'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 |
| San Juan vs. Sabine Royalty Trust | San Juan vs. Permian Basin Royalty | San Juan vs. Cross Timbers Royalty | San Juan vs. Mesa Royalty Trust |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |