Correlation Between Franklin Street and JBG SMITH
Can any of the company-specific risk be diversified away by investing in both Franklin Street 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 Franklin Street and JBG SMITH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Street Properties and JBG SMITH Properties, you can compare the effects of market volatilities on Franklin Street 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 Franklin Street with a short position of JBG SMITH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Street and JBG SMITH.
Diversification Opportunities for Franklin Street and JBG SMITH
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Franklin and JBG is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Street 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 Franklin Street 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 Franklin Street 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 Franklin Street i.e., Franklin Street and JBG SMITH go up and down completely randomly.
Pair Corralation between Franklin Street and JBG SMITH
Considering the 90-day investment horizon Franklin Street Properties is expected to generate 1.41 times more return on investment than JBG SMITH. However, Franklin Street is 1.41 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 0.04 per unit of risk. If you would invest 137.00 in Franklin Street Properties on August 31, 2024 and sell it today you would earn a total of 54.00 from holding Franklin Street Properties or generate 39.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Street Properties vs. JBG SMITH Properties
Performance |
| Timeline |
| Franklin Street Prop |
| JBG SMITH Properties |
Franklin Street and JBG SMITH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Street and JBG SMITH
The main advantage of trading using opposite Franklin Street and JBG SMITH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Street 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.| Franklin Street vs. Equity Commonwealth | Franklin Street vs. Cousins Properties Incorporated | Franklin Street vs. Creative Media Community | Franklin Street vs. Highwoods Properties |
| JBG SMITH vs. Boston Properties | JBG SMITH vs. Alexandria Real Estate | JBG SMITH vs. Hudson Pacific Properties | JBG SMITH vs. Office Properties Income |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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