Correlation Between Hunter Creek and JBG SMITH

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

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

Diversification Opportunities for Hunter Creek and JBG SMITH

0.37

Correlation Coefficient

Hunter Creek  JBG SMITH

Weak diversification

The 3 months correlation between Hunter and JBG is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Hunter Creek Mining 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 Hunter Creek 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 Hunter Creek Mining 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 Hunter Creek i.e., Hunter Creek and JBG SMITH go up and down completely randomly.

Pair Corralation between Hunter Creek and JBG SMITH

Given the investment horizon of 90 days Hunter Creek Mining is expected to generate 61.14 times more return on investment than JBG SMITH. However, Hunter Creek is 61.14 times more volatile than JBG SMITH Properties. It trades about 0.1 of its potential returns per unit of risk. JBG SMITH Properties is currently generating about 0.03 per unit of risk. If you would invest  9.80  in Hunter Creek Mining on December 19, 2024 and sell it today you would lose (9.80) from holding Hunter Creek Mining or give up 100.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.16%
Values	Daily Returns

Hunter Creek Mining  vs.  JBG SMITH Properties

Hunter Creek Mining

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hunter Creek Mining are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Hunter Creek exhibited solid returns over the last few months and may actually be approaching a breakup point.

JBG SMITH Properties

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in JBG SMITH Properties are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, JBG SMITH is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Hunter Creek and JBG SMITH

The main advantage of trading using opposite Hunter Creek and JBG SMITH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hunter Creek 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 Hunter Creek Mining 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 Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.