Correlation Between Berkshire Hathaway and Surge Energy
Can any of the company-specific risk be diversified away by investing in both Berkshire Hathaway and Surge 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 Surge 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 Surge Energy, you can compare the effects of market volatilities on Berkshire Hathaway and Surge 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 Surge Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hathaway and Surge Energy.
Diversification Opportunities for Berkshire Hathaway and Surge Energy
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Berkshire and Surge is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hathaway and Surge Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surge 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 Surge Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surge Energy has no effect on the direction of Berkshire Hathaway i.e., Berkshire Hathaway and Surge Energy go up and down completely randomly.
Pair Corralation between Berkshire Hathaway and Surge Energy
Assuming the 90 days horizon Berkshire Hathaway is expected to generate 0.43 times more return on investment than Surge Energy. However, Berkshire Hathaway is 2.33 times less risky than Surge Energy. It trades about 0.12 of its potential returns per unit of risk. Surge Energy is currently generating about -0.03 per unit of risk. If you would invest 44,867,100 in Berkshire Hathaway on December 4, 2024 and sell it today you would earn a total of 31,648,900 from holding Berkshire Hathaway or generate 70.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Berkshire Hathaway vs. Surge Energy
Performance |
| Timeline |
| Berkshire Hathaway |
| Surge Energy |
Berkshire Hathaway and Surge Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berkshire Hathaway and Surge Energy
The main advantage of trading using opposite Berkshire Hathaway and Surge Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Hathaway position performs unexpectedly, Surge 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 Surge Energy will offset losses from the drop in Surge 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 |
| Surge Energy vs. Petro Viking Energy | Surge Energy vs. Parex Resources | Surge Energy vs. Razor Energy Corp | Surge Energy vs. Prospera Energy |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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