Correlation Between JBG SMITH and Westrock Coffee
Can any of the company-specific risk be diversified away by investing in both JBG SMITH and Westrock Coffee 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 Westrock Coffee 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 Westrock Coffee, you can compare the effects of market volatilities on JBG SMITH and Westrock Coffee 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 Westrock Coffee. Check out your portfolio center. Please also check ongoing floating volatility patterns of JBG SMITH and Westrock Coffee.
Diversification Opportunities for JBG SMITH and Westrock Coffee
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between JBG and Westrock is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding JBG SMITH Properties and Westrock Coffee in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westrock Coffee 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 Westrock Coffee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westrock Coffee has no effect on the direction of JBG SMITH i.e., JBG SMITH and Westrock Coffee go up and down completely randomly.
Pair Corralation between JBG SMITH and Westrock Coffee
Given the investment horizon of 90 days JBG SMITH is expected to generate 9.46 times less return on investment than Westrock Coffee. But when comparing it to its historical volatility, JBG SMITH Properties is 1.43 times less risky than Westrock Coffee. It trades about 0.04 of its potential returns per unit of risk. Westrock Coffee is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 664.00 in Westrock Coffee on September 1, 2024 and sell it today you would earn a total of 139.00 from holding Westrock Coffee or generate 20.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JBG SMITH Properties vs. Westrock Coffee
Performance |
| Timeline |
| JBG SMITH Properties |
| Westrock Coffee |
JBG SMITH and Westrock Coffee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JBG SMITH and Westrock Coffee
The main advantage of trading using opposite JBG SMITH and Westrock Coffee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JBG SMITH position performs unexpectedly, Westrock Coffee 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 Westrock Coffee will offset losses from the drop in Westrock Coffee's long position.| JBG SMITH vs. Cousins Properties Incorporated | JBG SMITH vs. Highwoods Properties | JBG SMITH vs. Douglas Emmett | JBG SMITH vs. Equity Commonwealth |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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