Correlation Between JBG SMITH and One Liberty

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

Diversification Opportunities for JBG SMITH and One Liberty

0.33

Correlation Coefficient

JBG SMITH  One Liberty

Weak diversification

The 3 months correlation between JBG and One is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding JBG SMITH Properties and One Liberty Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on One Liberty 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 One Liberty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of One Liberty Properties has no effect on the direction of JBG SMITH i.e., JBG SMITH and One Liberty go up and down completely randomly.

Pair Corralation between JBG SMITH and One Liberty

Given the investment horizon of 90 days JBG SMITH Properties is expected to generate 1.57 times more return on investment than One Liberty. However, JBG SMITH is 1.57 times more volatile than One Liberty Properties. It trades about 0.04 of its potential returns per unit of risk. One Liberty Properties is currently generating about -0.03 per unit of risk. If you would invest  1,535  in JBG SMITH Properties on December 26, 2024 and sell it today you would earn a total of  52.00  from holding JBG SMITH Properties or generate 3.39% 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.  One Liberty Properties

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.

One Liberty Properties

Risk-Adjusted Performance

Very Weak

Over the last 90 days One Liberty Properties has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable essential indicators, One Liberty is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with JBG SMITH and One Liberty

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

The idea behind JBG SMITH Properties and One Liberty 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.

Check out your portfolio center.

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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.