Correlation Between Boston Properties and JBG SMITH
Can any of the company-specific risk be diversified away by investing in both Boston Properties 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 Boston Properties and JBG SMITH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boston Properties and JBG SMITH Properties, you can compare the effects of market volatilities on Boston Properties 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 Boston Properties with a short position of JBG SMITH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Properties and JBG SMITH.
Diversification Opportunities for Boston Properties and JBG SMITH
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Boston and JBG is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Boston Properties 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 Boston Properties 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 Boston Properties 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 Boston Properties i.e., Boston Properties and JBG SMITH go up and down completely randomly.
Pair Corralation between Boston Properties and JBG SMITH
Considering the 90-day investment horizon Boston Properties is expected to generate 0.66 times more return on investment than JBG SMITH. However, Boston Properties is 1.52 times less risky than JBG SMITH. It trades about -0.16 of its potential returns per unit of risk. JBG SMITH Properties is currently generating about -0.12 per unit of risk. If you would invest 8,739 in Boston Properties on August 28, 2024 and sell it today you would lose (527.00) from holding Boston Properties or give up 6.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boston Properties vs. JBG SMITH Properties
Performance |
| Timeline |
| Boston Properties |
| JBG SMITH Properties |
Boston Properties and JBG SMITH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Properties and JBG SMITH
The main advantage of trading using opposite Boston Properties and JBG SMITH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Properties 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.| Boston Properties vs. SL Green Realty | Boston Properties vs. Douglas Emmett | Boston Properties vs. Kilroy Realty Corp | Boston Properties vs. Alexandria Real Estate |
| JBG SMITH vs. Cousins Properties Incorporated | JBG SMITH vs. Highwoods Properties | JBG SMITH vs. Douglas Emmett | JBG SMITH vs. Equity Commonwealth |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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