Correlation Between JBG SMITH and Connecticut Light
Can any of the company-specific risk be diversified away by investing in both JBG SMITH and Connecticut Light 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 Connecticut Light 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 The Connecticut Light, you can compare the effects of market volatilities on JBG SMITH and Connecticut Light 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 Connecticut Light. Check out your portfolio center. Please also check ongoing floating volatility patterns of JBG SMITH and Connecticut Light.
Diversification Opportunities for JBG SMITH and Connecticut Light
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between JBG and Connecticut is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding JBG SMITH Properties and The Connecticut Light in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Connecticut Light 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 Connecticut Light. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Connecticut Light has no effect on the direction of JBG SMITH i.e., JBG SMITH and Connecticut Light go up and down completely randomly.
Pair Corralation between JBG SMITH and Connecticut Light
Given the investment horizon of 90 days JBG SMITH Properties is expected to generate 1.53 times more return on investment than Connecticut Light. However, JBG SMITH is 1.53 times more volatile than The Connecticut Light. It trades about 0.11 of its potential returns per unit of risk. The Connecticut Light is currently generating about 0.08 per unit of risk. If you would invest 1,565 in JBG SMITH Properties on September 13, 2024 and sell it today you would earn a total of 69.00 from holding JBG SMITH Properties or generate 4.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JBG SMITH Properties vs. The Connecticut Light
Performance |
| Timeline |
| JBG SMITH Properties |
| Connecticut Light |
JBG SMITH and Connecticut Light Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JBG SMITH and Connecticut Light
The main advantage of trading using opposite JBG SMITH and Connecticut Light positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JBG SMITH position performs unexpectedly, Connecticut Light 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 Connecticut Light will offset losses from the drop in Connecticut Light's long position.| JBG SMITH vs. Cousins Properties Incorporated | JBG SMITH vs. Highwoods Properties | JBG SMITH vs. Douglas Emmett | JBG SMITH vs. Equity Commonwealth |
| Connecticut Light vs. Avangrid | Connecticut Light vs. Dominion Energy | Connecticut Light vs. Centrais Electricas Brasileiras | Connecticut Light vs. Enel Chile SA |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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