Correlation Between Berkshire Hathaway and Getlink SE

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

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

Diversification Opportunities for Berkshire Hathaway and Getlink SE

0.36

Correlation Coefficient

Berkshire Hathaway  Getlink SE

Weak diversification

The 3 months correlation between Berkshire and Getlink is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hathaway and Getlink SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Getlink SE 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 Getlink SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Getlink SE has no effect on the direction of Berkshire Hathaway i.e., Berkshire Hathaway and Getlink SE go up and down completely randomly.

Pair Corralation between Berkshire Hathaway and Getlink SE

Assuming the 90 days trading horizon Berkshire Hathaway is expected to generate 0.77 times more return on investment than Getlink SE. However, Berkshire Hathaway is 1.3 times less risky than Getlink SE. It trades about 0.14 of its potential returns per unit of risk. Getlink SE is currently generating about 0.07 per unit of risk. If you would invest  44,520  in Berkshire Hathaway on December 4, 2024 and sell it today you would earn a total of  4,175  from holding Berkshire Hathaway or generate 9.38% return on investment over 90 days.

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

Berkshire Hathaway  vs.  Getlink SE

Berkshire Hathaway

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Berkshire Hathaway are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Berkshire Hathaway may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Getlink SE

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Getlink SE are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Getlink SE may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Berkshire Hathaway and Getlink SE

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

The idea behind Berkshire Hathaway and Getlink SE 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.