Correlation Between Bright Scholar and JBG SMITH

Can any of the company-specific risk be diversified away by investing in both Bright Scholar and JBG SMITH 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 Bright Scholar and JBG SMITH into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bright Scholar Education and JBG SMITH Properties, you can compare the effects of market volatilities on Bright Scholar and JBG SMITH 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 Bright Scholar with a short position of JBG SMITH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bright Scholar and JBG SMITH.

Diversification Opportunities for Bright Scholar and JBG SMITH

0.54

Correlation Coefficient

Bright Scholar  JBG SMITH

Very weak diversification

The 3 months correlation between Bright and JBG is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Bright Scholar Education and JBG SMITH Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JBG SMITH Properties and Bright Scholar 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 Bright Scholar Education are associated (or correlated) with JBG SMITH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JBG SMITH Properties has no effect on the direction of Bright Scholar i.e., Bright Scholar and JBG SMITH go up and down completely randomly.

Pair Corralation between Bright Scholar and JBG SMITH

Given the investment horizon of 90 days Bright Scholar Education is expected to under-perform the JBG SMITH. In addition to that, Bright Scholar is 5.15 times more volatile than JBG SMITH Properties. It trades about -0.03 of its total potential returns per unit of risk. JBG SMITH Properties is currently generating about 0.09 per unit of volatility. If you would invest  1,497  in JBG SMITH Properties on October 20, 2024 and sell it today you would earn a total of  45.00  from holding JBG SMITH Properties or generate 3.01% return on investment over 90 days.

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

Bright Scholar Education  vs.  JBG SMITH Properties

Bright Scholar Education

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bright Scholar Education has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

JBG SMITH Properties

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JBG SMITH Properties has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Bright Scholar and JBG SMITH

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

The idea behind Bright Scholar Education and JBG SMITH Properties 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 Global Correlations module to find global opportunities by holding instruments from different markets.