Correlation Between JBG SMITH and FormFactor
Can any of the company-specific risk be diversified away by investing in both JBG SMITH and FormFactor 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 FormFactor 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 FormFactor, you can compare the effects of market volatilities on JBG SMITH and FormFactor 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 FormFactor. Check out your portfolio center. Please also check ongoing floating volatility patterns of JBG SMITH and FormFactor.
Diversification Opportunities for JBG SMITH and FormFactor
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between JBG and FormFactor is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding JBG SMITH Properties and FormFactor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FormFactor 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 FormFactor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FormFactor has no effect on the direction of JBG SMITH i.e., JBG SMITH and FormFactor go up and down completely randomly.
Pair Corralation between JBG SMITH and FormFactor
Given the investment horizon of 90 days JBG SMITH is expected to generate 2.81 times less return on investment than FormFactor. But when comparing it to its historical volatility, JBG SMITH Properties is 1.08 times less risky than FormFactor. It trades about 0.04 of its potential returns per unit of risk. FormFactor is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 3,798 in FormFactor on September 1, 2024 and sell it today you would earn a total of 208.00 from holding FormFactor or generate 5.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JBG SMITH Properties vs. FormFactor
Performance |
| Timeline |
| JBG SMITH Properties |
| FormFactor |
JBG SMITH and FormFactor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JBG SMITH and FormFactor
The main advantage of trading using opposite JBG SMITH and FormFactor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JBG SMITH position performs unexpectedly, FormFactor 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 FormFactor will offset losses from the drop in FormFactor's long position.| JBG SMITH vs. Cousins Properties Incorporated | JBG SMITH vs. Highwoods Properties | JBG SMITH vs. Douglas Emmett | JBG SMITH vs. Equity Commonwealth |
| FormFactor vs. NXP Semiconductors NV | FormFactor vs. GSI Technology | FormFactor vs. MaxLinear | FormFactor vs. Texas Instruments Incorporated |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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