Correlation Between JBG SMITH and Envista Holdings

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

Diversification Opportunities for JBG SMITH and Envista Holdings

0.28

Correlation Coefficient

JBG SMITH  Envista Holdings

Modest diversification

The 3 months correlation between JBG and Envista is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding JBG SMITH Properties and Envista Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Envista Holdings Corp 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 Envista Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Envista Holdings Corp has no effect on the direction of JBG SMITH i.e., JBG SMITH and Envista Holdings go up and down completely randomly.

Pair Corralation between JBG SMITH and Envista Holdings

Given the investment horizon of 90 days JBG SMITH Properties is expected to generate 0.87 times more return on investment than Envista Holdings. However, JBG SMITH Properties is 1.15 times less risky than Envista Holdings. It trades about 0.0 of its potential returns per unit of risk. Envista Holdings Corp is currently generating about -0.03 per unit of risk. If you would invest  1,516  in JBG SMITH Properties on December 18, 2024 and sell it today you would lose (14.00) from holding JBG SMITH Properties or give up 0.92% of portfolio value over 90 days.

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

JBG SMITH Properties  vs.  Envista Holdings Corp

JBG SMITH Properties

Risk-Adjusted Performance

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.

Envista Holdings Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Envista Holdings Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Envista Holdings is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with JBG SMITH and Envista Holdings

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

The idea behind JBG SMITH Properties and Envista Holdings Corp 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.