Correlation Between Playa Hotels and JBG SMITH
Can any of the company-specific risk be diversified away by investing in both Playa Hotels 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 Playa Hotels and JBG SMITH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Playa Hotels Resorts and JBG SMITH Properties, you can compare the effects of market volatilities on Playa Hotels 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 Playa Hotels with a short position of JBG SMITH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playa Hotels and JBG SMITH.
Diversification Opportunities for Playa Hotels and JBG SMITH
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Playa and JBG is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Playa Hotels Resorts 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 Playa Hotels 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 Playa Hotels Resorts 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 Playa Hotels i.e., Playa Hotels and JBG SMITH go up and down completely randomly.
Pair Corralation between Playa Hotels and JBG SMITH
Given the investment horizon of 90 days Playa Hotels is expected to generate 2.5 times less return on investment than JBG SMITH. But when comparing it to its historical volatility, Playa Hotels Resorts is 1.26 times less risky than JBG SMITH. It trades about 0.02 of its potential returns per unit of risk. JBG SMITH Properties is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,410 in JBG SMITH Properties on August 31, 2024 and sell it today you would earn a total of 299.00 from holding JBG SMITH Properties or generate 21.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Playa Hotels Resorts vs. JBG SMITH Properties
Performance |
| Timeline |
| Playa Hotels Resorts |
| JBG SMITH Properties |
Playa Hotels and JBG SMITH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playa Hotels and JBG SMITH
The main advantage of trading using opposite Playa Hotels and JBG SMITH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playa Hotels 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.| Playa Hotels vs. Vail Resorts | Playa Hotels vs. Monarch Casino Resort | Playa Hotels vs. Hilton Grand Vacations | Playa Hotels vs. Full House Resorts |
| 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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