Correlation Between JBG SMITH and Duckhorn Portfolio

Can any of the company-specific risk be diversified away by investing in both JBG SMITH and Duckhorn Portfolio 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 Duckhorn Portfolio 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 Duckhorn Portfolio, you can compare the effects of market volatilities on JBG SMITH and Duckhorn Portfolio 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 Duckhorn Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of JBG SMITH and Duckhorn Portfolio.

Diversification Opportunities for JBG SMITH and Duckhorn Portfolio

0.6

Correlation Coefficient

JBG SMITH  Duckhorn Portfolio

Poor diversification

The 3 months correlation between JBG and Duckhorn is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding JBG SMITH Properties and Duckhorn Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duckhorn Portfolio 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 Duckhorn Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duckhorn Portfolio has no effect on the direction of JBG SMITH i.e., JBG SMITH and Duckhorn Portfolio go up and down completely randomly.

Pair Corralation between JBG SMITH and Duckhorn Portfolio

Given the investment horizon of 90 days JBG SMITH Properties is expected to generate 0.72 times more return on investment than Duckhorn Portfolio. However, JBG SMITH Properties is 1.38 times less risky than Duckhorn Portfolio. It trades about -0.16 of its potential returns per unit of risk. Duckhorn Portfolio is currently generating about -0.13 per unit of risk. If you would invest  1,726  in JBG SMITH Properties on February 2, 2024 and sell it today you would lose (230.00) from holding JBG SMITH Properties or give up 13.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	97.73%
Values	Daily Returns

JBG SMITH Properties  vs.  Duckhorn Portfolio

JBG SMITH Properties

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JBG SMITH Properties has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Duckhorn Portfolio

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Duckhorn Portfolio has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with JBG SMITH and Duckhorn Portfolio

The main advantage of trading using opposite JBG SMITH and Duckhorn Portfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JBG SMITH position performs unexpectedly, Duckhorn Portfolio 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 Duckhorn Portfolio will offset losses from the drop in Duckhorn Portfolio's long position.

The idea behind JBG SMITH Properties and Duckhorn Portfolio pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.