Correlation Between Sealed Air and JBG SMITH
Can any of the company-specific risk be diversified away by investing in both Sealed Air 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 Sealed Air and JBG SMITH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sealed Air and JBG SMITH Properties, you can compare the effects of market volatilities on Sealed Air 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 Sealed Air with a short position of JBG SMITH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sealed Air and JBG SMITH.
Diversification Opportunities for Sealed Air and JBG SMITH
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sealed and JBG is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Sealed Air 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 Sealed Air 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 Sealed Air 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 Sealed Air i.e., Sealed Air and JBG SMITH go up and down completely randomly.
Pair Corralation between Sealed Air and JBG SMITH
Considering the 90-day investment horizon Sealed Air is expected to under-perform the JBG SMITH. But the stock apears to be less risky and, when comparing its historical volatility, Sealed Air is 1.05 times less risky than JBG SMITH. The stock trades about -0.03 of its potential returns per unit of risk. The JBG SMITH Properties is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 1,797 in JBG SMITH Properties on August 27, 2024 and sell it today you would lose (140.00) from holding JBG SMITH Properties or give up 7.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sealed Air vs. JBG SMITH Properties
Performance |
| Timeline |
| Sealed Air |
| JBG SMITH Properties |
Sealed Air and JBG SMITH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sealed Air and JBG SMITH
The main advantage of trading using opposite Sealed Air and JBG SMITH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sealed Air 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.| Sealed Air vs. International Paper | Sealed Air vs. Sonoco Products | Sealed Air vs. Reynolds Consumer Products | Sealed Air vs. Ball Corporation |
| 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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