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
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Berkshire and San is 0.54. 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 generate 0.34 times more return on investment than San Juan. However, Berkshire Hathaway is 2.91 times less risky than San Juan. It trades about 0.1 of its potential returns per unit of risk. San Juan Basin is currently generating about -0.04 per unit of risk. If you would invest 34,661 in Berkshire Hathaway on September 12, 2024 and sell it today you would earn a total of 11,588 from holding Berkshire Hathaway or generate 33.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| 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. Sun Life Financial | Berkshire Hathaway vs. Arch Capital Group | Berkshire Hathaway vs. Hartford Financial Services |
| San Juan vs. POSCO Holdings | San Juan vs. Schweizerische Nationalbank | San Juan vs. Berkshire Hathaway | San Juan vs. Berkshire Hathaway |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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