Correlation Between Berkshire Hathaway and Sandstorm Gold
Can any of the company-specific risk be diversified away by investing in both Berkshire Hathaway and Sandstorm 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 Sandstorm Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berkshire Hathaway CDR and Sandstorm Gold Ltd, you can compare the effects of market volatilities on Berkshire Hathaway and Sandstorm 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 Sandstorm Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hathaway and Sandstorm Gold.
Diversification Opportunities for Berkshire Hathaway and Sandstorm Gold
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Berkshire and Sandstorm is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hathaway CDR and Sandstorm Gold Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sandstorm 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 CDR are associated (or correlated) with Sandstorm Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sandstorm Gold has no effect on the direction of Berkshire Hathaway i.e., Berkshire Hathaway and Sandstorm Gold go up and down completely randomly.
Pair Corralation between Berkshire Hathaway and Sandstorm Gold
Assuming the 90 days trading horizon Berkshire Hathaway is expected to generate 3.78 times less return on investment than Sandstorm Gold. But when comparing it to its historical volatility, Berkshire Hathaway CDR is 1.82 times less risky than Sandstorm Gold. It trades about 0.12 of its potential returns per unit of risk. Sandstorm Gold Ltd is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 826.00 in Sandstorm Gold Ltd on November 18, 2024 and sell it today you would earn a total of 78.00 from holding Sandstorm Gold Ltd or generate 9.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Berkshire Hathaway CDR vs. Sandstorm Gold Ltd
Performance |
| Timeline |
| Berkshire Hathaway CDR |
| Sandstorm Gold |
Berkshire Hathaway and Sandstorm Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berkshire Hathaway and Sandstorm Gold
The main advantage of trading using opposite Berkshire Hathaway and Sandstorm Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Hathaway position performs unexpectedly, Sandstorm 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 Sandstorm Gold will offset losses from the drop in Sandstorm Gold's long position.| Berkshire Hathaway vs. CVW CleanTech | Berkshire Hathaway vs. CNJ Capital Investments | Berkshire Hathaway vs. Canaf Investments | Berkshire Hathaway vs. Farstarcap Investment Corp |
| Sandstorm Gold vs. Osisko Gold Ro | Sandstorm Gold vs. Wheaton Precious Metals | Sandstorm Gold vs. Seabridge Gold | Sandstorm Gold vs. MAG Silver Corp |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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