Correlation Between JBG SMITH and Auddia

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

Diversification Opportunities for JBG SMITH and Auddia

0.19

Correlation Coefficient

JBG SMITH  Auddia

Average diversification

The 3 months correlation between JBG and Auddia is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding JBG SMITH Properties and Auddia Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auddia Inc 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 Auddia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auddia Inc has no effect on the direction of JBG SMITH i.e., JBG SMITH and Auddia go up and down completely randomly.

Pair Corralation between JBG SMITH and Auddia

Given the investment horizon of 90 days JBG SMITH is expected to generate 380.25 times less return on investment than Auddia. But when comparing it to its historical volatility, JBG SMITH Properties is 126.98 times less risky than Auddia. It trades about 0.07 of its potential returns per unit of risk. Auddia Inc is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  5.74  in Auddia Inc on September 15, 2024 and sell it today you would lose (3.24) from holding Auddia Inc or give up 56.45% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	71.43%
Values	Daily Returns

JBG SMITH Properties  vs.  Auddia Inc

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.

Auddia Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Auddia Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly weak fundamental indicators, Auddia showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JBG SMITH and Auddia

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

The idea behind JBG SMITH Properties and Auddia Inc 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.