Correlation Between JBG SMITH and Academy Sports
Can any of the company-specific risk be diversified away by investing in both JBG SMITH and Academy Sports 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 Academy Sports 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 Academy Sports Outdoors, you can compare the effects of market volatilities on JBG SMITH and Academy Sports 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 Academy Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of JBG SMITH and Academy Sports.
Diversification Opportunities for JBG SMITH and Academy Sports
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between JBG and Academy is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding JBG SMITH Properties and Academy Sports Outdoors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Academy Sports Outdoors 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 Academy Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Academy Sports Outdoors has no effect on the direction of JBG SMITH i.e., JBG SMITH and Academy Sports go up and down completely randomly.
Pair Corralation between JBG SMITH and Academy Sports
Given the investment horizon of 90 days JBG SMITH Properties is expected to generate 0.9 times more return on investment than Academy Sports. However, JBG SMITH Properties is 1.11 times less risky than Academy Sports. It trades about 0.01 of its potential returns per unit of risk. Academy Sports Outdoors is currently generating about 0.0 per unit of risk. If you would invest 1,813 in JBG SMITH Properties on September 3, 2024 and sell it today you would lose (104.00) from holding JBG SMITH Properties or give up 5.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JBG SMITH Properties vs. Academy Sports Outdoors
Performance |
| Timeline |
| JBG SMITH Properties |
| Academy Sports Outdoors |
JBG SMITH and Academy Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JBG SMITH and Academy Sports
The main advantage of trading using opposite JBG SMITH and Academy Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JBG SMITH position performs unexpectedly, Academy Sports 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 Academy Sports will offset losses from the drop in Academy Sports' long position.| JBG SMITH vs. Cousins Properties Incorporated | JBG SMITH vs. Highwoods Properties | JBG SMITH vs. Douglas Emmett | JBG SMITH vs. Equity Commonwealth |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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