Correlation Between CDW Corp and JBG SMITH
Can any of the company-specific risk be diversified away by investing in both CDW Corp 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 CDW Corp and JBG SMITH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CDW Corp and JBG SMITH Properties, you can compare the effects of market volatilities on CDW Corp 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 CDW Corp with a short position of JBG SMITH. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDW Corp and JBG SMITH.
Diversification Opportunities for CDW Corp and JBG SMITH
Very poor diversification
The 3 months correlation between CDW and JBG is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding CDW Corp 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 CDW Corp 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 CDW Corp 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 CDW Corp i.e., CDW Corp and JBG SMITH go up and down completely randomly.
Pair Corralation between CDW Corp and JBG SMITH
Considering the 90-day investment horizon CDW Corp is expected to under-perform the JBG SMITH. But the stock apears to be less risky and, when comparing its historical volatility, CDW Corp is 1.15 times less risky than JBG SMITH. The stock trades about -0.03 of its potential returns per unit of risk. The JBG SMITH Properties is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,316 in JBG SMITH Properties on August 24, 2024 and sell it today you would earn a total of 314.00 from holding JBG SMITH Properties or generate 23.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CDW Corp vs. JBG SMITH Properties
Performance |
| Timeline |
| CDW Corp |
| JBG SMITH Properties |
CDW Corp and JBG SMITH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CDW Corp and JBG SMITH
The main advantage of trading using opposite CDW Corp and JBG SMITH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CDW Corp 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.| CDW Corp vs. CACI International | CDW Corp vs. Jack Henry Associates | CDW Corp vs. Broadridge Financial Solutions | CDW Corp vs. ExlService Holdings |
| 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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