Correlation Between JBG SMITH and Alexanders

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

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

Diversification Opportunities for JBG SMITH and Alexanders

0.62

Correlation Coefficient

JBG SMITH  Alexanders

Poor diversification

The 3 months correlation between JBG and Alexanders is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding JBG SMITH Properties and Alexanders in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alexanders and JBG SMITH 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 JBG SMITH Properties are associated (or correlated) with Alexanders. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alexanders has no effect on the direction of JBG SMITH i.e., JBG SMITH and Alexanders go up and down completely randomly.

Pair Corralation between JBG SMITH and Alexanders

Given the investment horizon of 90 days JBG SMITH Properties is expected to under-perform the Alexanders. In addition to that, JBG SMITH is 1.18 times more volatile than Alexanders. It trades about -0.01 of its total potential returns per unit of risk. Alexanders is currently generating about 0.0 per unit of volatility. If you would invest  22,540  in Alexanders on September 3, 2024 and sell it today you would lose (179.00) from holding Alexanders or give up 0.79% of portfolio value over 90 days.

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

JBG SMITH Properties  vs.  Alexanders

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 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.

Alexanders

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alexanders has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong essential indicators, Alexanders is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with JBG SMITH and Alexanders

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

The idea behind JBG SMITH Properties and Alexanders 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.