Correlation Between JBG SMITH and Boston Properties

Can any of the company-specific risk be diversified away by investing in both JBG SMITH and Boston Properties 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 Boston Properties 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 Boston Properties, you can compare the effects of market volatilities on JBG SMITH and Boston Properties 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 Boston Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of JBG SMITH and Boston Properties.

Diversification Opportunities for JBG SMITH and Boston Properties

0.22

Correlation Coefficient

JBG SMITH  Boston Properties

Modest diversification

The 3 months correlation between JBG and Boston is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding JBG SMITH Properties and Boston Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Properties 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 Boston Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boston Properties has no effect on the direction of JBG SMITH i.e., JBG SMITH and Boston Properties go up and down completely randomly.

Pair Corralation between JBG SMITH and Boston Properties

Given the investment horizon of 90 days JBG SMITH Properties is expected to generate 1.05 times more return on investment than Boston Properties. However, JBG SMITH is 1.05 times more volatile than Boston Properties. It trades about 0.06 of its potential returns per unit of risk. Boston Properties is currently generating about -0.05 per unit of risk. If you would invest  1,506  in JBG SMITH Properties on December 27, 2024 and sell it today you would earn a total of  90.00  from holding JBG SMITH Properties or generate 5.98% return on investment over 90 days.

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

JBG SMITH Properties  vs.  Boston Properties

JBG SMITH Properties

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in JBG SMITH Properties are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, JBG SMITH may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Boston Properties

Risk-Adjusted Performance

Very Weak

Over the last 90 days Boston Properties has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest fragile performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with JBG SMITH and Boston Properties

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

The idea behind JBG SMITH Properties and Boston 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.