Correlation Between JBG SMITH and NETGEAR
Can any of the company-specific risk be diversified away by investing in both JBG SMITH and NETGEAR 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 NETGEAR 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 NETGEAR, you can compare the effects of market volatilities on JBG SMITH and NETGEAR 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 NETGEAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of JBG SMITH and NETGEAR.
Diversification Opportunities for JBG SMITH and NETGEAR
Excellent diversification
The 3 months correlation between JBG and NETGEAR is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding JBG SMITH Properties and NETGEAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NETGEAR 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 NETGEAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NETGEAR has no effect on the direction of JBG SMITH i.e., JBG SMITH and NETGEAR go up and down completely randomly.
Pair Corralation between JBG SMITH and NETGEAR
Given the investment horizon of 90 days JBG SMITH is expected to generate 16.15 times less return on investment than NETGEAR. But when comparing it to its historical volatility, JBG SMITH Properties is 1.39 times less risky than NETGEAR. It trades about 0.0 of its potential returns per unit of risk. NETGEAR is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,777 in NETGEAR on September 14, 2024 and sell it today you would earn a total of 757.00 from holding NETGEAR or generate 42.6% 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. NETGEAR
Performance |
| Timeline |
| JBG SMITH Properties |
| NETGEAR |
JBG SMITH and NETGEAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JBG SMITH and NETGEAR
The main advantage of trading using opposite JBG SMITH and NETGEAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JBG SMITH position performs unexpectedly, NETGEAR 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 NETGEAR will offset losses from the drop in NETGEAR's long position.| JBG SMITH vs. Cousins Properties Incorporated | JBG SMITH vs. Highwoods Properties | JBG SMITH vs. Douglas Emmett | JBG SMITH vs. Equity Commonwealth |
| NETGEAR vs. Passage Bio | NETGEAR vs. Black Diamond Therapeutics | NETGEAR vs. Alector | NETGEAR vs. Century Therapeutics |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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