Correlation Between JBG SMITH and Cheniere Energy
Can any of the company-specific risk be diversified away by investing in both JBG SMITH and Cheniere Energy 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 Cheniere Energy 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 Cheniere Energy Partners, you can compare the effects of market volatilities on JBG SMITH and Cheniere Energy 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 Cheniere Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of JBG SMITH and Cheniere Energy.
Diversification Opportunities for JBG SMITH and Cheniere Energy
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between JBG and Cheniere is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding JBG SMITH Properties and Cheniere Energy Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cheniere Energy Partners 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 Cheniere Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cheniere Energy Partners has no effect on the direction of JBG SMITH i.e., JBG SMITH and Cheniere Energy go up and down completely randomly.
Pair Corralation between JBG SMITH and Cheniere Energy
Given the investment horizon of 90 days JBG SMITH is expected to generate 1.17 times less return on investment than Cheniere Energy. In addition to that, JBG SMITH is 1.2 times more volatile than Cheniere Energy Partners. It trades about 0.1 of its total potential returns per unit of risk. Cheniere Energy Partners is currently generating about 0.14 per unit of volatility. If you would invest 4,620 in Cheniere Energy Partners on September 1, 2024 and sell it today you would earn a total of 1,222 from holding Cheniere Energy Partners or generate 26.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JBG SMITH Properties vs. Cheniere Energy Partners
Performance |
| Timeline |
| JBG SMITH Properties |
| Cheniere Energy Partners |
JBG SMITH and Cheniere Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JBG SMITH and Cheniere Energy
The main advantage of trading using opposite JBG SMITH and Cheniere Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JBG SMITH position performs unexpectedly, Cheniere Energy 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 Cheniere Energy will offset losses from the drop in Cheniere Energy's long position.| JBG SMITH vs. Cousins Properties Incorporated | JBG SMITH vs. Highwoods Properties | JBG SMITH vs. Douglas Emmett | JBG SMITH vs. Equity Commonwealth |
| Cheniere Energy vs. Plains All American | Cheniere Energy vs. Hess Midstream Partners | Cheniere Energy vs. Plains GP Holdings | Cheniere Energy vs. Antero Midstream Partners |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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