Correlation Between JBG SMITH and Agree Realty
Can any of the company-specific risk be diversified away by investing in both JBG SMITH and Agree Realty 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 JBG SMITH and Agree Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JBG SMITH Properties and Agree Realty, you can compare the effects of market volatilities on JBG SMITH and Agree Realty 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 JBG SMITH with a short position of Agree Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of JBG SMITH and Agree Realty.
Diversification Opportunities for JBG SMITH and Agree Realty
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between JBG and Agree is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding JBG SMITH Properties and Agree Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agree Realty and JBG SMITH 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 JBG SMITH Properties are associated (or correlated) with Agree Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agree Realty has no effect on the direction of JBG SMITH i.e., JBG SMITH and Agree Realty go up and down completely randomly.
Pair Corralation between JBG SMITH and Agree Realty
Given the investment horizon of 90 days JBG SMITH Properties is expected to under-perform the Agree Realty. In addition to that, JBG SMITH is 2.58 times more volatile than Agree Realty. It trades about -0.12 of its total potential returns per unit of risk. Agree Realty is currently generating about 0.11 per unit of volatility. If you would invest 7,478 in Agree Realty on August 26, 2024 and sell it today you would earn a total of 167.00 from holding Agree Realty or generate 2.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JBG SMITH Properties vs. Agree Realty
Performance |
| Timeline |
| JBG SMITH Properties |
| Agree Realty |
JBG SMITH and Agree Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JBG SMITH and Agree Realty
The main advantage of trading using opposite JBG SMITH and Agree Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JBG SMITH position performs unexpectedly, Agree Realty 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 Agree Realty will offset losses from the drop in Agree Realty's long position.| 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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