Correlation Between Boston Beer and JBG SMITH
Can any of the company-specific risk be diversified away by investing in both Boston Beer 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 Boston Beer and JBG SMITH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boston Beer and JBG SMITH Properties, you can compare the effects of market volatilities on Boston Beer 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 Boston Beer with a short position of JBG SMITH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Beer and JBG SMITH.
Diversification Opportunities for Boston Beer and JBG SMITH
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Boston and JBG is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Boston Beer 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 Boston Beer 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 Boston Beer 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 Boston Beer i.e., Boston Beer and JBG SMITH go up and down completely randomly.
Pair Corralation between Boston Beer and JBG SMITH
Considering the 90-day investment horizon Boston Beer is expected to generate 8.57 times less return on investment than JBG SMITH. In addition to that, Boston Beer is 1.09 times more volatile than JBG SMITH Properties. It trades about 0.0 of its total potential returns per unit of risk. JBG SMITH Properties is currently generating about 0.01 per unit of volatility. If you would invest 1,802 in JBG SMITH Properties on September 2, 2024 and sell it today you would lose (93.00) from holding JBG SMITH Properties or give up 5.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boston Beer vs. JBG SMITH Properties
Performance |
| Timeline |
| Boston Beer |
| JBG SMITH Properties |
Boston Beer and JBG SMITH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Beer and JBG SMITH
The main advantage of trading using opposite Boston Beer and JBG SMITH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Beer 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.| Boston Beer vs. Compania Cervecerias Unidas | Boston Beer vs. Molson Coors Brewing | Boston Beer vs. Suntory Beverage Food | Boston Beer vs. Carlsberg AS |
| JBG SMITH vs. Cousins Properties Incorporated | JBG SMITH vs. Highwoods Properties | JBG SMITH vs. Douglas Emmett | JBG SMITH vs. Equity Commonwealth |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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