Correlation Between Singapore ReinsuranceLimit and Berkshire Hathaway
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By analyzing existing cross correlation between Singapore Reinsurance and Berkshire Hathaway, you can compare the effects of market volatilities on Singapore ReinsuranceLimit 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 Singapore ReinsuranceLimit with a short position of Berkshire Hathaway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore ReinsuranceLimit and Berkshire Hathaway.
Diversification Opportunities for Singapore ReinsuranceLimit and Berkshire Hathaway
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Singapore and Berkshire is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Reinsurance and Berkshire Hathaway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berkshire Hathaway and Singapore ReinsuranceLimit 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 Singapore Reinsurance 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 Singapore ReinsuranceLimit i.e., Singapore ReinsuranceLimit and Berkshire Hathaway go up and down completely randomly.
Pair Corralation between Singapore ReinsuranceLimit and Berkshire Hathaway
Assuming the 90 days trading horizon Singapore ReinsuranceLimit is expected to generate 1.17 times less return on investment than Berkshire Hathaway. In addition to that, Singapore ReinsuranceLimit is 1.77 times more volatile than Berkshire Hathaway. It trades about 0.18 of its total potential returns per unit of risk. Berkshire Hathaway is currently generating about 0.38 per unit of volatility. If you would invest 40,430 in Berkshire Hathaway on September 3, 2024 and sell it today you would earn a total of 5,500 from holding Berkshire Hathaway or generate 13.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Singapore Reinsurance vs. Berkshire Hathaway
Performance |
| Timeline |
| Singapore ReinsuranceLimit |
| Berkshire Hathaway |
Singapore ReinsuranceLimit and Berkshire Hathaway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore ReinsuranceLimit and Berkshire Hathaway
The main advantage of trading using opposite Singapore ReinsuranceLimit and Berkshire Hathaway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore ReinsuranceLimit 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.The idea behind Singapore Reinsurance and Berkshire Hathaway pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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