Correlation Between JBG SMITH and Interactive Brokers

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

Diversification Opportunities for JBG SMITH and Interactive Brokers

0.03

Correlation Coefficient

JBG SMITH  Interactive Brokers

Significant diversification

The 3 months correlation between JBG and Interactive is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding JBG SMITH Properties and Interactive Brokers Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interactive Brokers 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 Interactive Brokers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interactive Brokers has no effect on the direction of JBG SMITH i.e., JBG SMITH and Interactive Brokers go up and down completely randomly.

Pair Corralation between JBG SMITH and Interactive Brokers

Given the investment horizon of 90 days JBG SMITH Properties is expected to generate 0.55 times more return on investment than Interactive Brokers. However, JBG SMITH Properties is 1.82 times less risky than Interactive Brokers. It trades about -0.04 of its potential returns per unit of risk. Interactive Brokers Group is currently generating about -0.05 per unit of risk. If you would invest  1,568  in JBG SMITH Properties on January 27, 2025 and sell it today you would lose (105.00) from holding JBG SMITH Properties or give up 6.7% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

JBG SMITH Properties  vs.  Interactive Brokers Group

JBG SMITH Properties

Risk-Adjusted Performance

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 comparatively stable technical and fundamental indicators, JBG SMITH is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Interactive Brokers

Risk-Adjusted Performance

Very Weak

Over the last 90 days Interactive Brokers Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Stock's forward-looking signals remain relatively invariable which may send shares a bit higher in May 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with JBG SMITH and Interactive Brokers

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

The idea behind JBG SMITH Properties and Interactive Brokers Group 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.

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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.