Correlation Between JBG SMITH and SL Green

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

Diversification Opportunities for JBG SMITH and SL Green

0.34

Correlation Coefficient

JBG SMITH  SL Green

Weak diversification

The 3 months correlation between JBG and SLG is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding JBG SMITH Properties and SL Green Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SL Green Realty 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 SL Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SL Green Realty has no effect on the direction of JBG SMITH i.e., JBG SMITH and SL Green go up and down completely randomly.

Pair Corralation between JBG SMITH and SL Green

Given the investment horizon of 90 days JBG SMITH Properties is expected to generate 0.87 times more return on investment than SL Green. However, JBG SMITH Properties is 1.15 times less risky than SL Green. It trades about -0.19 of its potential returns per unit of risk. SL Green Realty is currently generating about -0.29 per unit of risk. If you would invest  1,616  in JBG SMITH Properties on October 11, 2024 and sell it today you would lose (122.00) from holding JBG SMITH Properties or give up 7.55% 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.  SL Green Realty

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 weak performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

SL Green Realty

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SL Green Realty has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, SL Green is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with JBG SMITH and SL Green

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

The idea behind JBG SMITH Properties and SL Green Realty 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.