Correlation Between Jaguar Animal and Berkshire Hathaway

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

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

Diversification Opportunities for Jaguar Animal and Berkshire Hathaway

-0.35

Correlation Coefficient

Jaguar Animal  Berkshire Hathaway

Very good diversification

The 3 months correlation between Jaguar and Berkshire is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Jaguar Animal Health and Berkshire Hathaway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berkshire Hathaway and Jaguar Animal 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 Jaguar Animal Health 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 Jaguar Animal i.e., Jaguar Animal and Berkshire Hathaway go up and down completely randomly.

Pair Corralation between Jaguar Animal and Berkshire Hathaway

Given the investment horizon of 90 days Jaguar Animal Health is expected to generate 23.27 times more return on investment than Berkshire Hathaway. However, Jaguar Animal is 23.27 times more volatile than Berkshire Hathaway. It trades about 0.35 of its potential returns per unit of risk. Berkshire Hathaway is currently generating about 0.07 per unit of risk. If you would invest  11.00  in Jaguar Animal Health on February 11, 2024 and sell it today you would earn a total of  18.00  from holding Jaguar Animal Health or generate 163.64% return on investment over 90 days.

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

Jaguar Animal Health  vs.  Berkshire Hathaway

Jaguar Animal Health

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jaguar Animal Health are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, Jaguar Animal showed solid returns over the last few months and may actually be approaching a breakup point.

Berkshire Hathaway

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Berkshire Hathaway are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Berkshire Hathaway is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Jaguar Animal and Berkshire Hathaway

The main advantage of trading using opposite Jaguar Animal and Berkshire Hathaway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jaguar Animal 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 Jaguar Animal Health 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.