Correlation Between JBG SMITH and CONSOLIDATED

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

Diversification Opportunities for JBG SMITH and CONSOLIDATED

-0.3

Correlation Coefficient

JBG SMITH  CONSOLIDATED

Very good diversification

The 3 months correlation between JBG and CONSOLIDATED is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding JBG SMITH Properties and CONSOLIDATED EDISON N in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CONSOLIDATED EDISON 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 CONSOLIDATED. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CONSOLIDATED EDISON has no effect on the direction of JBG SMITH i.e., JBG SMITH and CONSOLIDATED go up and down completely randomly.

Pair Corralation between JBG SMITH and CONSOLIDATED

Given the investment horizon of 90 days JBG SMITH Properties is expected to generate 1.96 times more return on investment than CONSOLIDATED. However, JBG SMITH is 1.96 times more volatile than CONSOLIDATED EDISON N. It trades about 0.27 of its potential returns per unit of risk. CONSOLIDATED EDISON N is currently generating about 0.1 per unit of risk. If you would invest  1,491  in JBG SMITH Properties on September 18, 2024 and sell it today you would earn a total of  156.00  from holding JBG SMITH Properties or generate 10.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	42.86%
Values	Daily Returns

JBG SMITH Properties  vs.  CONSOLIDATED EDISON N

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 latest weak performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

CONSOLIDATED EDISON

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CONSOLIDATED EDISON N has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for CONSOLIDATED EDISON N investors.

Pair Trading with JBG SMITH and CONSOLIDATED

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

The idea behind JBG SMITH Properties and CONSOLIDATED EDISON N 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 Commodity Directory module to find actively traded commodities issued by global exchanges.