Correlation Between JBG SMITH and WT Offshore
Can any of the company-specific risk be diversified away by investing in both JBG SMITH and WT Offshore 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 WT Offshore 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 WT Offshore, you can compare the effects of market volatilities on JBG SMITH and WT Offshore 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 WT Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of JBG SMITH and WT Offshore.
Diversification Opportunities for JBG SMITH and WT Offshore
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between JBG and WTI is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding JBG SMITH Properties and WT Offshore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WT Offshore 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 WT Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WT Offshore has no effect on the direction of JBG SMITH i.e., JBG SMITH and WT Offshore go up and down completely randomly.
Pair Corralation between JBG SMITH and WT Offshore
Given the investment horizon of 90 days JBG SMITH Properties is expected to under-perform the WT Offshore. But the stock apears to be less risky and, when comparing its historical volatility, JBG SMITH Properties is 1.53 times less risky than WT Offshore. The stock trades about -0.12 of its potential returns per unit of risk. The WT Offshore is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 205.00 in WT Offshore on August 28, 2024 and sell it today you would lose (7.00) from holding WT Offshore or give up 3.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
JBG SMITH Properties vs. WT Offshore
Performance |
| Timeline |
| JBG SMITH Properties |
| WT Offshore |
JBG SMITH and WT Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JBG SMITH and WT Offshore
The main advantage of trading using opposite JBG SMITH and WT Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JBG SMITH position performs unexpectedly, WT Offshore 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 WT Offshore will offset losses from the drop in WT Offshore's long position.| JBG SMITH vs. Cousins Properties Incorporated | JBG SMITH vs. Highwoods Properties | JBG SMITH vs. Douglas Emmett | JBG SMITH vs. Equity Commonwealth |
| WT Offshore vs. Evolution Petroleum | WT Offshore vs. Ring Energy | WT Offshore vs. Gran Tierra Energy | WT Offshore vs. Permian Resources |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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