Correlation Between JBG SMITH and Franklin Street
Can any of the company-specific risk be diversified away by investing in both JBG SMITH and Franklin Street 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 Franklin Street 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 Franklin Street Properties, you can compare the effects of market volatilities on JBG SMITH and Franklin Street 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 Franklin Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of JBG SMITH and Franklin Street.
Diversification Opportunities for JBG SMITH and Franklin Street
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between JBG and Franklin is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding JBG SMITH Properties and Franklin Street Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Street Prop 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 Franklin Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Street Prop has no effect on the direction of JBG SMITH i.e., JBG SMITH and Franklin Street go up and down completely randomly.
Pair Corralation between JBG SMITH and Franklin Street
Given the investment horizon of 90 days JBG SMITH Properties is expected to under-perform the Franklin Street. But the stock apears to be less risky and, when comparing its historical volatility, JBG SMITH Properties is 1.41 times less risky than Franklin Street. The stock trades about -0.14 of its potential returns per unit of risk. The Franklin Street Properties is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 180.00 in Franklin Street Properties on August 27, 2024 and sell it today you would earn a total of 14.00 from holding Franklin Street Properties or generate 7.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JBG SMITH Properties vs. Franklin Street Properties
Performance |
| Timeline |
| JBG SMITH Properties |
| Franklin Street Prop |
JBG SMITH and Franklin Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JBG SMITH and Franklin Street
The main advantage of trading using opposite JBG SMITH and Franklin Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JBG SMITH position performs unexpectedly, Franklin Street 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 Franklin Street will offset losses from the drop in Franklin Street's long position.| JBG SMITH vs. Cousins Properties Incorporated | JBG SMITH vs. Highwoods Properties | JBG SMITH vs. Douglas Emmett | JBG SMITH vs. Equity Commonwealth |
| Franklin Street vs. Equity Commonwealth | Franklin Street vs. Cousins Properties Incorporated | Franklin Street vs. Creative Media Community | Franklin Street vs. Highwoods Properties |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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