Correlation Between Crescent Capital and Presidio Property

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

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

Diversification Opportunities for Crescent Capital and Presidio Property

-0.44

Correlation Coefficient

Crescent Capital  Presidio Property

Very good diversification

The 3 months correlation between Crescent and Presidio is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Crescent Capital BDC 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 Crescent Capital 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 Crescent Capital BDC 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 Crescent Capital i.e., Crescent Capital and Presidio Property go up and down completely randomly.

Pair Corralation between Crescent Capital and Presidio Property

Given the investment horizon of 90 days Crescent Capital is expected to generate 1.97 times less return on investment than Presidio Property. But when comparing it to its historical volatility, Crescent Capital BDC is 5.46 times less risky than Presidio Property. It trades about 0.14 of its potential returns per unit of risk. Presidio Property Trust is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  64.00  in Presidio Property Trust on September 3, 2024 and sell it today you would earn a total of  6.00  from holding Presidio Property Trust or generate 9.38% return on investment over 90 days.

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

Crescent Capital BDC  vs.  Presidio Property Trust

Crescent Capital BDC

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Crescent Capital BDC are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Crescent Capital may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Presidio Property Trust

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Presidio Property Trust are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting technical and fundamental indicators, Presidio Property unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Crescent Capital and Presidio Property

The main advantage of trading using opposite Crescent Capital and Presidio Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crescent Capital 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 Crescent Capital BDC 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.