Correlation Between JBG SMITH and Valeura Energy
Can any of the company-specific risk be diversified away by investing in both JBG SMITH and Valeura 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 Valeura 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 Valeura Energy, you can compare the effects of market volatilities on JBG SMITH and Valeura 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 Valeura Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of JBG SMITH and Valeura Energy.
Diversification Opportunities for JBG SMITH and Valeura Energy
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between JBG and Valeura is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding JBG SMITH Properties and Valeura Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valeura Energy 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 Valeura Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valeura Energy has no effect on the direction of JBG SMITH i.e., JBG SMITH and Valeura Energy go up and down completely randomly.
Pair Corralation between JBG SMITH and Valeura Energy
Given the investment horizon of 90 days JBG SMITH is expected to generate 2.17 times less return on investment than Valeura Energy. But when comparing it to its historical volatility, JBG SMITH Properties is 1.22 times less risky than Valeura Energy. It trades about 0.06 of its potential returns per unit of risk. Valeura Energy is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 484.00 in Valeura Energy on November 7, 2024 and sell it today you would earn a total of 27.00 from holding Valeura Energy or generate 5.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
JBG SMITH Properties vs. Valeura Energy
Performance |
| Timeline |
| JBG SMITH Properties |
| Valeura Energy |
JBG SMITH and Valeura Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JBG SMITH and Valeura Energy
The main advantage of trading using opposite JBG SMITH and Valeura Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JBG SMITH position performs unexpectedly, Valeura 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 Valeura Energy will offset losses from the drop in Valeura 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 |
| Valeura Energy vs. Barrick Gold Corp | Valeura Energy vs. Keurig Dr Pepper | Valeura Energy vs. ioneer Ltd American | Valeura Energy vs. Loud Beverage Group |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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