Correlation Between Berkshire Hathaway and Sun Life
Can any of the company-specific risk be diversified away by investing in both Berkshire Hathaway and Sun Life 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 Sun Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berkshire Hathaway and Sun Life Financial, you can compare the effects of market volatilities on Berkshire Hathaway and Sun Life 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 Sun Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hathaway and Sun Life.
Diversification Opportunities for Berkshire Hathaway and Sun Life
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Berkshire and Sun is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hathaway and Sun Life Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Life Financial 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 Sun Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Life Financial has no effect on the direction of Berkshire Hathaway i.e., Berkshire Hathaway and Sun Life go up and down completely randomly.
Pair Corralation between Berkshire Hathaway and Sun Life
Assuming the 90 days trading horizon Berkshire Hathaway is expected to generate 0.92 times more return on investment than Sun Life. However, Berkshire Hathaway is 1.09 times less risky than Sun Life. It trades about 0.09 of its potential returns per unit of risk. Sun Life Financial is currently generating about 0.08 per unit of risk. If you would invest 29,570 in Berkshire Hathaway on August 25, 2024 and sell it today you would earn a total of 15,600 from holding Berkshire Hathaway or generate 52.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Berkshire Hathaway vs. Sun Life Financial
Performance |
| Timeline |
| Berkshire Hathaway |
| Sun Life Financial |
Berkshire Hathaway and Sun Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berkshire Hathaway and Sun Life
The main advantage of trading using opposite Berkshire Hathaway and Sun Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Hathaway position performs unexpectedly, Sun Life 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 Sun Life will offset losses from the drop in Sun Life's long position.| Berkshire Hathaway vs. BioNTech SE | Berkshire Hathaway vs. THORNEY TECHS LTD | Berkshire Hathaway vs. SOFI TECHNOLOGIES | Berkshire Hathaway vs. RCM TECHNOLOGIES |
| Sun Life vs. Berkshire Hathaway | Sun Life vs. Zurich Insurance Group | Sun Life vs. Superior Plus Corp | Sun Life vs. NMI Holdings |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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