Correlation Between WEC Energy and JBG SMITH

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

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

Diversification Opportunities for WEC Energy and JBG SMITH

0.14

Correlation Coefficient

WEC Energy  JBG SMITH

Average diversification

The 3 months correlation between WEC and JBG is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding WEC Energy Group 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 WEC Energy 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 WEC Energy Group 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 WEC Energy i.e., WEC Energy and JBG SMITH go up and down completely randomly.

Pair Corralation between WEC Energy and JBG SMITH

Considering the 90-day investment horizon WEC Energy is expected to generate 14.17 times less return on investment than JBG SMITH. But when comparing it to its historical volatility, WEC Energy Group is 2.15 times less risky than JBG SMITH. It trades about 0.04 of its potential returns per unit of risk. JBG SMITH Properties is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  1,467  in JBG SMITH Properties on May 5, 2025 and sell it today you would earn a total of  624.00  from holding JBG SMITH Properties or generate 42.54% return on investment over 90 days.

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

WEC Energy Group  vs.  JBG SMITH Properties

WEC Energy Group

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in WEC Energy Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, WEC Energy is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

JBG SMITH Properties

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in JBG SMITH Properties are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady 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 WEC Energy and JBG SMITH

The main advantage of trading using opposite WEC Energy and JBG SMITH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WEC Energy 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 WEC Energy Group 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.