Correlation Between Douglas Emmett and JBG SMITH
Can any of the company-specific risk be diversified away by investing in both Douglas Emmett and JBG SMITH 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 Douglas Emmett and JBG SMITH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Douglas Emmett and JBG SMITH Properties, you can compare the effects of market volatilities on Douglas Emmett and JBG SMITH 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 Douglas Emmett with a short position of JBG SMITH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Douglas Emmett and JBG SMITH.
Diversification Opportunities for Douglas Emmett and JBG SMITH
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Douglas and JBG is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Douglas Emmett and JBG SMITH Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JBG SMITH Properties and Douglas Emmett 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 Douglas Emmett are associated (or correlated) with JBG SMITH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JBG SMITH Properties has no effect on the direction of Douglas Emmett i.e., Douglas Emmett and JBG SMITH go up and down completely randomly.
Pair Corralation between Douglas Emmett and JBG SMITH
Considering the 90-day investment horizon Douglas Emmett is expected to generate 1.39 times more return on investment than JBG SMITH. However, Douglas Emmett is 1.39 times more volatile than JBG SMITH Properties. It trades about 0.04 of its potential returns per unit of risk. JBG SMITH Properties is currently generating about -0.17 per unit of risk. If you would invest 1,341 in Douglas Emmett on February 6, 2024 and sell it today you would earn a total of 44.00 from holding Douglas Emmett or generate 3.28% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Douglas Emmett vs. JBG SMITH Properties
Performance |
Timeline |
Douglas Emmett |
JBG SMITH Properties |
Douglas Emmett and JBG SMITH Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Douglas Emmett and JBG SMITH
The main advantage of trading using opposite Douglas Emmett and JBG SMITH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Douglas Emmett position performs unexpectedly, JBG SMITH 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 JBG SMITH will offset losses from the drop in JBG SMITH's long position.Douglas Emmett vs. Boston Properties | Douglas Emmett vs. Kilroy Realty Corp | Douglas Emmett vs. Alexandria Real Estate | Douglas Emmett vs. Vornado Realty Trust |
JBG SMITH vs. Boston Properties | JBG SMITH vs. Douglas Emmett | JBG SMITH vs. Kilroy Realty Corp | JBG SMITH vs. Alexandria Real Estate |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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