Correlation Between Berkshire Hathaway and Axa SA
Can any of the company-specific risk be diversified away by investing in both Berkshire Hathaway and Axa SA 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 Axa SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berkshire Hathaway and Axa SA ADR, you can compare the effects of market volatilities on Berkshire Hathaway and Axa SA 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 Axa SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hathaway and Axa SA.
Diversification Opportunities for Berkshire Hathaway and Axa SA
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Berkshire and Axa is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hathaway and Axa SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axa SA ADR 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 Axa SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axa SA ADR has no effect on the direction of Berkshire Hathaway i.e., Berkshire Hathaway and Axa SA go up and down completely randomly.
Pair Corralation between Berkshire Hathaway and Axa SA
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 | 4.76% |
| Values | Daily Returns |
Berkshire Hathaway vs. Axa SA ADR
Performance |
| Timeline |
| Berkshire Hathaway |
| Axa SA ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Berkshire Hathaway and Axa SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berkshire Hathaway and Axa SA
The main advantage of trading using opposite Berkshire Hathaway and Axa SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Hathaway position performs unexpectedly, Axa SA 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 Axa SA will offset losses from the drop in Axa SA'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 |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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