Correlation Between SL Green and JBG SMITH

Can any of the company-specific risk be diversified away by investing in both SL Green 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 SL Green and JBG SMITH into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SL Green Realty and JBG SMITH Properties, you can compare the effects of market volatilities on SL Green 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 SL Green with a short position of JBG SMITH. Check out your portfolio center. Please also check ongoing floating volatility patterns of SL Green and JBG SMITH.

Diversification Opportunities for SL Green and JBG SMITH

0.25

Correlation Coefficient

SL Green  JBG SMITH

Modest diversification

The 3 months correlation between SLG and JBG is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding SL Green Realty 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 SL Green 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 SL Green Realty 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 SL Green i.e., SL Green and JBG SMITH go up and down completely randomly.

Pair Corralation between SL Green and JBG SMITH

Considering the 90-day investment horizon SL Green Realty is expected to under-perform the JBG SMITH. In addition to that, SL Green is 1.16 times more volatile than JBG SMITH Properties. It trades about -0.04 of its total potential returns per unit of risk. JBG SMITH Properties is currently generating about 0.1 per unit of volatility. If you would invest  1,442  in JBG SMITH Properties on February 19, 2025 and sell it today you would earn a total of  213.00  from holding JBG SMITH Properties or generate 14.77% return on investment over 90 days.

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

SL Green Realty  vs.  JBG SMITH Properties

SL Green Realty

Risk-Adjusted Performance

Very Weak

Over the last 90 days SL Green Realty has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's essential indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

JBG SMITH Properties

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in JBG SMITH Properties are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting technical and fundamental indicators, JBG SMITH unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SL Green and JBG SMITH

The main advantage of trading using opposite SL Green and JBG SMITH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SL Green 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.

The idea behind SL Green Realty and JBG SMITH Properties 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.