Correlation Between JBG SMITH and Where Food

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

Diversification Opportunities for JBG SMITH and Where Food

-0.39

Correlation Coefficient

JBG SMITH  Where Food

Very good diversification

The 3 months correlation between JBG and Where is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding JBG SMITH Properties and Where Food Comes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Where Food Comes 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 Where Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Where Food Comes has no effect on the direction of JBG SMITH i.e., JBG SMITH and Where Food go up and down completely randomly.

Pair Corralation between JBG SMITH and Where Food

Given the investment horizon of 90 days JBG SMITH Properties is expected to generate 0.76 times more return on investment than Where Food. However, JBG SMITH Properties is 1.31 times less risky than Where Food. It trades about 0.31 of its potential returns per unit of risk. Where Food Comes is currently generating about 0.22 per unit of risk. If you would invest  1,491  in JBG SMITH Properties on September 17, 2024 and sell it today you would earn a total of  170.00  from holding JBG SMITH Properties or generate 11.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

JBG SMITH Properties  vs.  Where Food Comes

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.

Where Food Comes

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Where Food Comes are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal fundamental indicators, Where Food reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JBG SMITH and Where Food

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

The idea behind JBG SMITH Properties and Where Food Comes 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.