Correlation Between Jacquet Metal and Berkshire Hathaway

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

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

Diversification Opportunities for Jacquet Metal and Berkshire Hathaway

0.51

Correlation Coefficient

Jacquet Metal  Berkshire Hathaway

Very weak diversification

The 3 months correlation between Jacquet and Berkshire is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Jacquet Metal Service and Berkshire Hathaway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berkshire Hathaway and Jacquet Metal 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 Jacquet Metal Service 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 Jacquet Metal i.e., Jacquet Metal and Berkshire Hathaway go up and down completely randomly.

Pair Corralation between Jacquet Metal and Berkshire Hathaway

Assuming the 90 days horizon Jacquet Metal Service is expected to generate 1.96 times more return on investment than Berkshire Hathaway. However, Jacquet Metal is 1.96 times more volatile than Berkshire Hathaway. It trades about 0.14 of its potential returns per unit of risk. Berkshire Hathaway is currently generating about 0.14 per unit of risk. If you would invest  1,700  in Jacquet Metal Service on December 23, 2024 and sell it today you would earn a total of  390.00  from holding Jacquet Metal Service or generate 22.94% return on investment over 90 days.

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

Jacquet Metal Service  vs.  Berkshire Hathaway

Jacquet Metal Service

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jacquet Metal Service are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Jacquet Metal reported solid returns over the last few months and may actually be approaching a breakup point.

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. Despite nearly 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 Jacquet Metal and Berkshire Hathaway

The main advantage of trading using opposite Jacquet Metal and Berkshire Hathaway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jacquet Metal 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 Jacquet Metal Service 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.

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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.