Correlation Between Berkshire Hathaway and Sangoma Technologies

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

By analyzing existing cross correlation between Berkshire Hathaway CDR and Sangoma Technologies Corp, you can compare the effects of market volatilities on Berkshire Hathaway and Sangoma Technologies 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 Sangoma Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hathaway and Sangoma Technologies.

Diversification Opportunities for Berkshire Hathaway and Sangoma Technologies

-0.7

Correlation Coefficient

Berkshire Hathaway  Sangoma Technologies

Excellent diversification

The 3 months correlation between Berkshire and Sangoma is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hathaway CDR and Sangoma Technologies Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sangoma Technologies Corp 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 CDR are associated (or correlated) with Sangoma Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sangoma Technologies Corp has no effect on the direction of Berkshire Hathaway i.e., Berkshire Hathaway and Sangoma Technologies go up and down completely randomly.

Pair Corralation between Berkshire Hathaway and Sangoma Technologies

Assuming the 90 days trading horizon Berkshire Hathaway CDR is expected to generate 0.37 times more return on investment than Sangoma Technologies. However, Berkshire Hathaway CDR is 2.7 times less risky than Sangoma Technologies. It trades about 0.11 of its potential returns per unit of risk. Sangoma Technologies Corp is currently generating about -0.04 per unit of risk. If you would invest  3,553  in Berkshire Hathaway CDR on December 3, 2024 and sell it today you would earn a total of  262.00  from holding Berkshire Hathaway CDR or generate 7.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Berkshire Hathaway CDR  vs.  Sangoma Technologies Corp

Berkshire Hathaway CDR

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Berkshire Hathaway CDR are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Berkshire Hathaway may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Sangoma Technologies Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sangoma Technologies Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Berkshire Hathaway and Sangoma Technologies

The main advantage of trading using opposite Berkshire Hathaway and Sangoma Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Hathaway position performs unexpectedly, Sangoma Technologies 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 Sangoma Technologies will offset losses from the drop in Sangoma Technologies' long position.

The idea behind Berkshire Hathaway CDR and Sangoma Technologies Corp 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.