Correlation Between Nexpoint Residential and JBG SMITH
Can any of the company-specific risk be diversified away by investing in both Nexpoint Residential and JBG SMITH 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 Nexpoint Residential and JBG SMITH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nexpoint Residential Trust and JBG SMITH Properties, you can compare the effects of market volatilities on Nexpoint Residential and JBG SMITH 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 Nexpoint Residential with a short position of JBG SMITH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nexpoint Residential and JBG SMITH.
Diversification Opportunities for Nexpoint Residential and JBG SMITH
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nexpoint and JBG is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Nexpoint Residential Trust and JBG SMITH Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JBG SMITH Properties and Nexpoint Residential 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 Nexpoint Residential Trust are associated (or correlated) with JBG SMITH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JBG SMITH Properties has no effect on the direction of Nexpoint Residential i.e., Nexpoint Residential and JBG SMITH go up and down completely randomly.
Pair Corralation between Nexpoint Residential and JBG SMITH
Given the investment horizon of 90 days Nexpoint Residential Trust is expected to generate 0.66 times more return on investment than JBG SMITH. However, Nexpoint Residential Trust is 1.52 times less risky than JBG SMITH. It trades about 0.3 of its potential returns per unit of risk. JBG SMITH Properties is currently generating about -0.06 per unit of risk. If you would invest 4,269 in Nexpoint Residential Trust on August 31, 2024 and sell it today you would earn a total of 477.00 from holding Nexpoint Residential Trust or generate 11.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nexpoint Residential Trust vs. JBG SMITH Properties
Performance |
| Timeline |
| Nexpoint Residential |
| JBG SMITH Properties |
Nexpoint Residential and JBG SMITH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nexpoint Residential and JBG SMITH
The main advantage of trading using opposite Nexpoint Residential and JBG SMITH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nexpoint Residential position performs unexpectedly, JBG SMITH 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 JBG SMITH will offset losses from the drop in JBG SMITH's long position.| Nexpoint Residential vs. Independence Realty Trust | Nexpoint Residential vs. Community Healthcare Trust | Nexpoint Residential vs. Terreno Realty | Nexpoint Residential vs. National Storage Affiliates |
| JBG SMITH vs. Boston Properties | JBG SMITH vs. Alexandria Real Estate | JBG SMITH vs. Hudson Pacific Properties | JBG SMITH vs. Office Properties Income |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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