Correlation Between JBG SMITH and Burlington Stores
Can any of the company-specific risk be diversified away by investing in both JBG SMITH and Burlington Stores 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 Burlington Stores 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 Burlington Stores, you can compare the effects of market volatilities on JBG SMITH and Burlington Stores 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 Burlington Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of JBG SMITH and Burlington Stores.
Diversification Opportunities for JBG SMITH and Burlington Stores
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between JBG and Burlington is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding JBG SMITH Properties and Burlington Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burlington Stores 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 Burlington Stores. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Burlington Stores has no effect on the direction of JBG SMITH i.e., JBG SMITH and Burlington Stores go up and down completely randomly.
Pair Corralation between JBG SMITH and Burlington Stores
Given the investment horizon of 90 days JBG SMITH Properties is expected to generate about the same return on investment as Burlington Stores. But, JBG SMITH Properties is 1.09 times less risky than Burlington Stores. It trades about 0.1 of its potential returns per unit of risk. Burlington Stores is currently generating about 0.09 per unit of risk. If you would invest 23,549 in Burlington Stores on September 3, 2024 and sell it today you would earn a total of 4,639 from holding Burlington Stores or generate 19.7% 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. Burlington Stores
Performance |
| Timeline |
| JBG SMITH Properties |
| Burlington Stores |
JBG SMITH and Burlington Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JBG SMITH and Burlington Stores
The main advantage of trading using opposite JBG SMITH and Burlington Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JBG SMITH position performs unexpectedly, Burlington Stores 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 Burlington Stores will offset losses from the drop in Burlington Stores' long position.| JBG SMITH vs. Cousins Properties Incorporated | JBG SMITH vs. Highwoods Properties | JBG SMITH vs. Douglas Emmett | JBG SMITH vs. Equity Commonwealth |
| Burlington Stores vs. The TJX Companies | Burlington Stores vs. Guess Inc | Burlington Stores vs. Urban Outfitters | Burlington Stores vs. Childrens Place |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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