Correlation Between Berkshire Hathaway and SalMar ASA
Can any of the company-specific risk be diversified away by investing in both Berkshire Hathaway and SalMar ASA 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 SalMar ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berkshire Hathaway and SalMar ASA, you can compare the effects of market volatilities on Berkshire Hathaway and SalMar ASA 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 SalMar ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hathaway and SalMar ASA.
Diversification Opportunities for Berkshire Hathaway and SalMar ASA
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Berkshire and SalMar is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hathaway and SalMar ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SalMar ASA 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 SalMar ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SalMar ASA has no effect on the direction of Berkshire Hathaway i.e., Berkshire Hathaway and SalMar ASA go up and down completely randomly.
Pair Corralation between Berkshire Hathaway and SalMar ASA
Assuming the 90 days horizon Berkshire Hathaway is expected to generate 0.83 times more return on investment than SalMar ASA. However, Berkshire Hathaway is 1.21 times less risky than SalMar ASA. It trades about 0.14 of its potential returns per unit of risk. SalMar ASA is currently generating about -0.01 per unit of risk. If you would invest 65,350,000 in Berkshire Hathaway on December 30, 2024 and sell it today you would earn a total of 8,300,000 from holding Berkshire Hathaway or generate 12.7% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Berkshire Hathaway vs. SalMar ASA
Performance |
Timeline |
Berkshire Hathaway |
SalMar ASA |
Berkshire Hathaway and SalMar ASA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Berkshire Hathaway and SalMar ASA
The main advantage of trading using opposite Berkshire Hathaway and SalMar ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Hathaway position performs unexpectedly, SalMar ASA 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 SalMar ASA will offset losses from the drop in SalMar ASA's long position.Berkshire Hathaway vs. CHIBA BANK | Berkshire Hathaway vs. PRINCIPAL FINANCIAL | Berkshire Hathaway vs. REVO INSURANCE SPA | Berkshire Hathaway vs. Direct Line Insurance |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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