Correlation Between JBG SMITH and INGEVITY

Can any of the company-specific risk be diversified away by investing in both JBG SMITH and INGEVITY 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 INGEVITY 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 INGEVITY P 3875, you can compare the effects of market volatilities on JBG SMITH and INGEVITY 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 INGEVITY. Check out your portfolio center. Please also check ongoing floating volatility patterns of JBG SMITH and INGEVITY.

Diversification Opportunities for JBG SMITH and INGEVITY

0.15

Correlation Coefficient

JBG SMITH  INGEVITY

Average diversification

The 3 months correlation between JBG and INGEVITY is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding JBG SMITH Properties and INGEVITY P 3875 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INGEVITY P 3875 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 INGEVITY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INGEVITY P 3875 has no effect on the direction of JBG SMITH i.e., JBG SMITH and INGEVITY go up and down completely randomly.

Pair Corralation between JBG SMITH and INGEVITY

Given the investment horizon of 90 days JBG SMITH Properties is expected to under-perform the INGEVITY. In addition to that, JBG SMITH is 1.78 times more volatile than INGEVITY P 3875. It trades about -0.14 of its total potential returns per unit of risk. INGEVITY P 3875 is currently generating about -0.16 per unit of volatility. If you would invest  9,038  in INGEVITY P 3875 on September 25, 2024 and sell it today you would lose (729.00) from holding INGEVITY P 3875 or give up 8.07% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	92.86%
Values	Daily Returns

JBG SMITH Properties  vs.  INGEVITY P 3875

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 unfluctuating 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.

INGEVITY P 3875

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days INGEVITY P 3875 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating 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 INGEVITY P 3875 investors.

Pair Trading with JBG SMITH and INGEVITY

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

The idea behind JBG SMITH Properties and INGEVITY P 3875 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.