Correlation Between JBG SMITH and Alvotech
Can any of the company-specific risk be diversified away by investing in both JBG SMITH and Alvotech 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 Alvotech 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 Alvotech, you can compare the effects of market volatilities on JBG SMITH and Alvotech 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 Alvotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of JBG SMITH and Alvotech.
Diversification Opportunities for JBG SMITH and Alvotech
Good diversification
The 3 months correlation between JBG and Alvotech is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding JBG SMITH Properties and Alvotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alvotech 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 Alvotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alvotech has no effect on the direction of JBG SMITH i.e., JBG SMITH and Alvotech go up and down completely randomly.
Pair Corralation between JBG SMITH and Alvotech
Given the investment horizon of 90 days JBG SMITH Properties is expected to generate 1.4 times more return on investment than Alvotech. However, JBG SMITH is 1.4 times more volatile than Alvotech. It trades about -0.09 of its potential returns per unit of risk. Alvotech is currently generating about -0.25 per unit of risk. If you would invest 1,773 in JBG SMITH Properties on August 30, 2024 and sell it today you would lose (97.00) from holding JBG SMITH Properties or give up 5.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JBG SMITH Properties vs. Alvotech
Performance |
| Timeline |
| JBG SMITH Properties |
| Alvotech |
JBG SMITH and Alvotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JBG SMITH and Alvotech
The main advantage of trading using opposite JBG SMITH and Alvotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JBG SMITH position performs unexpectedly, Alvotech 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 Alvotech will offset losses from the drop in Alvotech's long position.| JBG SMITH vs. Boston Properties | JBG SMITH vs. Douglas Emmett | JBG SMITH vs. Kilroy Realty Corp | JBG SMITH vs. Alexandria Real Estate |
| Alvotech vs. Ikena Oncology | Alvotech vs. Eliem Therapeutics | Alvotech vs. HCW Biologics | Alvotech vs. RenovoRx |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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