Correlation Between Atlanticus Holdings and Presidio Property

Can any of the company-specific risk be diversified away by investing in both Atlanticus Holdings and Presidio Property 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 Atlanticus Holdings and Presidio Property into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Atlanticus Holdings Corp and Presidio Property Trust, you can compare the effects of market volatilities on Atlanticus Holdings and Presidio Property 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 Atlanticus Holdings with a short position of Presidio Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlanticus Holdings and Presidio Property.

Diversification Opportunities for Atlanticus Holdings and Presidio Property

-0.34

Correlation Coefficient

Atlanticus Holdings  Presidio Property

Very good diversification

The 3 months correlation between Atlanticus and Presidio is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Atlanticus Holdings Corp and Presidio Property Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Presidio Property Trust and Atlanticus Holdings 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 Atlanticus Holdings Corp are associated (or correlated) with Presidio Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Presidio Property Trust has no effect on the direction of Atlanticus Holdings i.e., Atlanticus Holdings and Presidio Property go up and down completely randomly.

Pair Corralation between Atlanticus Holdings and Presidio Property

Assuming the 90 days horizon Atlanticus Holdings Corp is expected to generate 0.38 times more return on investment than Presidio Property. However, Atlanticus Holdings Corp is 2.66 times less risky than Presidio Property. It trades about 0.16 of its potential returns per unit of risk. Presidio Property Trust is currently generating about -0.02 per unit of risk. If you would invest  2,265  in Atlanticus Holdings Corp on August 31, 2024 and sell it today you would earn a total of  143.00  from holding Atlanticus Holdings Corp or generate 6.31% return on investment over 90 days.

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

Atlanticus Holdings Corp  vs.  Presidio Property Trust

Atlanticus Holdings Corp

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Atlanticus Holdings Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable fundamental indicators, Atlanticus Holdings is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Presidio Property Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Presidio Property Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Presidio Property is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Atlanticus Holdings and Presidio Property

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

The idea behind Atlanticus Holdings Corp and Presidio Property Trust 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.