Correlation Between Berkshire Hathaway and Athene Holding
Can any of the company-specific risk be diversified away by investing in both Berkshire Hathaway and Athene Holding 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 Athene Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berkshire Hathaway and Athene Holding, you can compare the effects of market volatilities on Berkshire Hathaway and Athene Holding 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 Athene Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hathaway and Athene Holding.
Diversification Opportunities for Berkshire Hathaway and Athene Holding
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Berkshire and Athene is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hathaway and Athene Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Athene Holding 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 Athene Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Athene Holding has no effect on the direction of Berkshire Hathaway i.e., Berkshire Hathaway and Athene Holding go up and down completely randomly.
Pair Corralation between Berkshire Hathaway and Athene Holding
Assuming the 90 days horizon Berkshire Hathaway is expected to generate 6.24 times more return on investment than Athene Holding. However, Berkshire Hathaway is 6.24 times more volatile than Athene Holding. It trades about 0.14 of its potential returns per unit of risk. Athene Holding is currently generating about 0.12 per unit of risk. If you would invest 45,849 in Berkshire Hathaway on August 28, 2024 and sell it today you would earn a total of 1,894 from holding Berkshire Hathaway or generate 4.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Berkshire Hathaway vs. Athene Holding
Performance |
| Timeline |
| Berkshire Hathaway |
| Athene Holding |
Berkshire Hathaway and Athene Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berkshire Hathaway and Athene Holding
The main advantage of trading using opposite Berkshire Hathaway and Athene Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Hathaway position performs unexpectedly, Athene Holding 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 Athene Holding will offset losses from the drop in Athene Holding'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 |
| Athene Holding vs. Athene Holding | Athene Holding vs. Athene Holding | Athene Holding vs. Athene Holding | Athene Holding vs. Argo Group International |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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