Correlation Between JBG SMITH and Cincinnati Financial
Can any of the company-specific risk be diversified away by investing in both JBG SMITH and Cincinnati Financial 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 Cincinnati Financial 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 Cincinnati Financial, you can compare the effects of market volatilities on JBG SMITH and Cincinnati Financial 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 Cincinnati Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of JBG SMITH and Cincinnati Financial.
Diversification Opportunities for JBG SMITH and Cincinnati Financial
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between JBG and Cincinnati is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding JBG SMITH Properties and Cincinnati Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cincinnati Financial 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 Cincinnati Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cincinnati Financial has no effect on the direction of JBG SMITH i.e., JBG SMITH and Cincinnati Financial go up and down completely randomly.
Pair Corralation between JBG SMITH and Cincinnati Financial
Given the investment horizon of 90 days JBG SMITH Properties is expected to under-perform the Cincinnati Financial. In addition to that, JBG SMITH is 2.09 times more volatile than Cincinnati Financial. It trades about -0.03 of its total potential returns per unit of risk. Cincinnati Financial is currently generating about -0.03 per unit of volatility. If you would invest 15,117 in Cincinnati Financial on September 12, 2024 and sell it today you would lose (134.00) from holding Cincinnati Financial or give up 0.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JBG SMITH Properties vs. Cincinnati Financial
Performance |
| Timeline |
| JBG SMITH Properties |
| Cincinnati Financial |
JBG SMITH and Cincinnati Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JBG SMITH and Cincinnati Financial
The main advantage of trading using opposite JBG SMITH and Cincinnati Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JBG SMITH position performs unexpectedly, Cincinnati Financial 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 Cincinnati Financial will offset losses from the drop in Cincinnati Financial's long position.| JBG SMITH vs. Highwoods Properties | JBG SMITH vs. Douglas Emmett | JBG SMITH vs. Equity Commonwealth | JBG SMITH vs. Kilroy Realty Corp |
| Cincinnati Financial vs. Aeye Inc | Cincinnati Financial vs. Ep Emerging Markets | Cincinnati Financial vs. LiCycle Holdings Corp | Cincinnati Financial vs. SEI Investments |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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