Correlation Between JBG SMITH and Dolphin Entertainment

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

Diversification Opportunities for JBG SMITH and Dolphin Entertainment

0.02

Correlation Coefficient

JBG SMITH  Dolphin Entertainment

Significant diversification

The 3 months correlation between JBG and Dolphin is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding JBG SMITH Properties and Dolphin Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dolphin Entertainment 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 Dolphin Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dolphin Entertainment has no effect on the direction of JBG SMITH i.e., JBG SMITH and Dolphin Entertainment go up and down completely randomly.

Pair Corralation between JBG SMITH and Dolphin Entertainment

Given the investment horizon of 90 days JBG SMITH is expected to generate 1.32 times less return on investment than Dolphin Entertainment. But when comparing it to its historical volatility, JBG SMITH Properties is 2.23 times less risky than Dolphin Entertainment. It trades about 0.05 of its potential returns per unit of risk. Dolphin Entertainment is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  104.00  in Dolphin Entertainment on December 28, 2024 and sell it today you would earn a total of  2.00  from holding Dolphin Entertainment or generate 1.92% return on investment over 90 days.

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

JBG SMITH Properties  vs.  Dolphin Entertainment

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 3 (%) 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.

Dolphin Entertainment

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Dolphin Entertainment are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Dolphin Entertainment may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with JBG SMITH and Dolphin Entertainment

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

The idea behind JBG SMITH Properties and Dolphin Entertainment 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.