Correlation Between JBG SMITH and EMBARQ

Can any of the company-specific risk be diversified away by investing in both JBG SMITH and EMBARQ 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 EMBARQ 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 EMBARQ P 7995, you can compare the effects of market volatilities on JBG SMITH and EMBARQ 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 EMBARQ. Check out your portfolio center. Please also check ongoing floating volatility patterns of JBG SMITH and EMBARQ.

Diversification Opportunities for JBG SMITH and EMBARQ

-0.42

Correlation Coefficient

JBG SMITH  EMBARQ

Very good diversification

The 3 months correlation between JBG and EMBARQ is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding JBG SMITH Properties and EMBARQ P 7995 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMBARQ P 7995 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 EMBARQ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMBARQ P 7995 has no effect on the direction of JBG SMITH i.e., JBG SMITH and EMBARQ go up and down completely randomly.

Pair Corralation between JBG SMITH and EMBARQ

Given the investment horizon of 90 days JBG SMITH is expected to generate 32.33 times less return on investment than EMBARQ. But when comparing it to its historical volatility, JBG SMITH Properties is 3.34 times less risky than EMBARQ. It trades about 0.0 of its potential returns per unit of risk. EMBARQ P 7995 is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  4,313  in EMBARQ P 7995 on October 10, 2024 and sell it today you would lose (1,563) from holding EMBARQ P 7995 or give up 36.24% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.79%
Values	Daily Returns

JBG SMITH Properties  vs.  EMBARQ P 7995

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.

EMBARQ P 7995

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EMBARQ P 7995 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for EMBARQ P 7995 investors.

Pair Trading with JBG SMITH and EMBARQ

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

The idea behind JBG SMITH Properties and EMBARQ P 7995 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.