Correlation Between Ageas SA/NV and Berkshire Hathaway

Can any of the company-specific risk be diversified away by investing in both Ageas SA/NV 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 Ageas SA/NV and Berkshire Hathaway into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ageas SANV and Berkshire Hathaway, you can compare the effects of market volatilities on Ageas SA/NV 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 Ageas SA/NV with a short position of Berkshire Hathaway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ageas SA/NV and Berkshire Hathaway.

Diversification Opportunities for Ageas SA/NV and Berkshire Hathaway

0.95

Correlation Coefficient

Ageas SA/NV  Berkshire Hathaway

Almost no diversification

The 3 months correlation between Ageas and Berkshire is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding ageas SANV and Berkshire Hathaway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berkshire Hathaway and Ageas SA/NV 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 ageas SANV 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 Ageas SA/NV i.e., Ageas SA/NV and Berkshire Hathaway go up and down completely randomly.

Pair Corralation between Ageas SA/NV and Berkshire Hathaway

Assuming the 90 days horizon ageas SANV is expected to generate 0.96 times more return on investment than Berkshire Hathaway. However, ageas SANV is 1.04 times less risky than Berkshire Hathaway. It trades about 0.34 of its potential returns per unit of risk. Berkshire Hathaway is currently generating about 0.21 per unit of risk. If you would invest  4,833  in ageas SANV on December 29, 2024 and sell it today you would earn a total of  1,278  from holding ageas SANV or generate 26.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

ageas SANV  vs.  Berkshire Hathaway

Ageas SA/NV

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in ageas SANV are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Ageas SA/NV showed solid returns over the last few months and may actually be approaching a breakup point.

Berkshire Hathaway

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Berkshire Hathaway are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile basic indicators, Berkshire Hathaway sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ageas SA/NV and Berkshire Hathaway

The main advantage of trading using opposite Ageas SA/NV and Berkshire Hathaway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ageas SA/NV 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 ageas SANV 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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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.