Correlation Between Berkshire Hathaway and Argo Gold
Can any of the company-specific risk be diversified away by investing in both Berkshire Hathaway and Argo Gold 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 Argo Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berkshire Hathaway and Argo Gold, you can compare the effects of market volatilities on Berkshire Hathaway and Argo Gold 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 Argo Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hathaway and Argo Gold.
Diversification Opportunities for Berkshire Hathaway and Argo Gold
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Berkshire and Argo is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hathaway and Argo Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argo Gold 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 Argo Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argo Gold has no effect on the direction of Berkshire Hathaway i.e., Berkshire Hathaway and Argo Gold go up and down completely randomly.
Pair Corralation between Berkshire Hathaway and Argo Gold
Assuming the 90 days horizon Berkshire Hathaway is expected to generate 2.82 times less return on investment than Argo Gold. But when comparing it to its historical volatility, Berkshire Hathaway is 6.58 times less risky than Argo Gold. It trades about 0.12 of its potential returns per unit of risk. Argo Gold is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 4.81 in Argo Gold on August 29, 2024 and sell it today you would earn a total of 0.93 from holding Argo Gold or generate 19.33% 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. Argo Gold
Performance |
| Timeline |
| Berkshire Hathaway |
| Argo Gold |
Berkshire Hathaway and Argo Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berkshire Hathaway and Argo Gold
The main advantage of trading using opposite Berkshire Hathaway and Argo Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Hathaway position performs unexpectedly, Argo Gold 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 Argo Gold will offset losses from the drop in Argo Gold's long position.| Berkshire Hathaway vs. American International Group | Berkshire Hathaway vs. Sun Life Financial | Berkshire Hathaway vs. Arch Capital Group | Berkshire Hathaway vs. Hartford Financial Services |
| Argo Gold vs. Vertiv Holdings Co | Argo Gold vs. Nasdaq Inc | Argo Gold vs. McDonalds | Argo Gold vs. Walmart |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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