Correlation Between HNI Corp and JBG SMITH
Can any of the company-specific risk be diversified away by investing in both HNI 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 HNI 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 HNI Corp and JBG SMITH Properties, you can compare the effects of market volatilities on HNI 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 HNI Corp with a short position of JBG SMITH. Check out your portfolio center. Please also check ongoing floating volatility patterns of HNI Corp and JBG SMITH.
Diversification Opportunities for HNI Corp and JBG SMITH
Very good diversification
The 3 months correlation between HNI and JBG is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding HNI 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 HNI 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 HNI 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 HNI Corp i.e., HNI Corp and JBG SMITH go up and down completely randomly.
Pair Corralation between HNI Corp and JBG SMITH
Considering the 90-day investment horizon HNI Corp is expected to generate 1.1 times more return on investment than JBG SMITH. However, HNI Corp is 1.1 times more volatile than JBG SMITH Properties. It trades about 0.1 of its potential returns per unit of risk. JBG SMITH Properties is currently generating about 0.1 per unit of risk. If you would invest 4,621 in HNI Corp on September 1, 2024 and sell it today you would earn a total of 1,044 from holding HNI Corp or generate 22.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HNI Corp vs. JBG SMITH Properties
Performance |
| Timeline |
| HNI Corp |
| JBG SMITH Properties |
HNI Corp and JBG SMITH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HNI Corp and JBG SMITH
The main advantage of trading using opposite HNI Corp and JBG SMITH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HNI 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.The idea behind HNI Corp and JBG SMITH Properties 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.| 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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