Correlation Between Fidelis Insurance and Berkshire Hathaway
Can any of the company-specific risk be diversified away by investing in both Fidelis Insurance and Berkshire Hathaway 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 Fidelis Insurance and Berkshire Hathaway into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelis Insurance Holdings and Berkshire Hathaway, you can compare the effects of market volatilities on Fidelis Insurance and Berkshire Hathaway 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 Fidelis Insurance with a short position of Berkshire Hathaway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelis Insurance and Berkshire Hathaway.
Diversification Opportunities for Fidelis Insurance and Berkshire Hathaway
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelis and Berkshire is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Fidelis Insurance Holdings and Berkshire Hathaway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berkshire Hathaway and Fidelis Insurance 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 Fidelis Insurance Holdings are associated (or correlated) with Berkshire Hathaway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Berkshire Hathaway has no effect on the direction of Fidelis Insurance i.e., Fidelis Insurance and Berkshire Hathaway go up and down completely randomly.
Pair Corralation between Fidelis Insurance and Berkshire Hathaway
Given the investment horizon of 90 days Fidelis Insurance Holdings is expected to generate 58.55 times more return on investment than Berkshire Hathaway. However, Fidelis Insurance is 58.55 times more volatile than Berkshire Hathaway. It trades about 0.06 of its potential returns per unit of risk. Berkshire Hathaway is currently generating about 0.11 per unit of risk. If you would invest 0.00 in Fidelis Insurance Holdings on August 30, 2024 and sell it today you would earn a total of 2,066 from holding Fidelis Insurance Holdings or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 72.53% |
| Values | Daily Returns |
Fidelis Insurance Holdings vs. Berkshire Hathaway
Performance |
| Timeline |
| Fidelis Insurance |
| Berkshire Hathaway |
Fidelis Insurance and Berkshire Hathaway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelis Insurance and Berkshire Hathaway
The main advantage of trading using opposite Fidelis Insurance and Berkshire Hathaway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelis Insurance position performs unexpectedly, Berkshire Hathaway 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 Berkshire Hathaway will offset losses from the drop in Berkshire Hathaway's long position.| Fidelis Insurance vs. Global Indemnity PLC | Fidelis Insurance vs. Erie Indemnity | Fidelis Insurance vs. AMERISAFE | Fidelis Insurance vs. Diamond Hill Investment |
| 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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