Correlation Between Samsung Electronics and Berkshire Hathaway

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

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

Diversification Opportunities for Samsung Electronics and Berkshire Hathaway

0.26

Correlation Coefficient

Samsung Electronics  Berkshire Hathaway

Modest diversification

The 3 months correlation between Samsung and Berkshire is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Berkshire Hathaway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berkshire Hathaway and Samsung Electronics 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 Samsung Electronics Co 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 Samsung Electronics i.e., Samsung Electronics and Berkshire Hathaway go up and down completely randomly.

Pair Corralation between Samsung Electronics and Berkshire Hathaway

Assuming the 90 days horizon Samsung Electronics is expected to generate 1.54 times less return on investment than Berkshire Hathaway. In addition to that, Samsung Electronics is 1.74 times more volatile than Berkshire Hathaway. It trades about 0.05 of its total potential returns per unit of risk. Berkshire Hathaway is currently generating about 0.14 per unit of volatility. If you would invest  43,905  in Berkshire Hathaway on December 25, 2024 and sell it today you would earn a total of  4,900  from holding Berkshire Hathaway or generate 11.16% return on investment over 90 days.

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

Samsung Electronics Co  vs.  Berkshire Hathaway

Samsung Electronics

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Samsung Electronics Co are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Samsung Electronics may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Berkshire Hathaway

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Berkshire Hathaway are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Berkshire Hathaway may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Samsung Electronics and Berkshire Hathaway

The main advantage of trading using opposite Samsung Electronics and Berkshire Hathaway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics 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 Samsung Electronics Co 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..