Correlation Between Medalist Diversified and Presidio Property

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

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

Diversification Opportunities for Medalist Diversified and Presidio Property

0.4

Correlation Coefficient

Medalist Diversified  Presidio Property

Very weak diversification

The 3 months correlation between Medalist and Presidio is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Medalist Diversified Reit 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 Medalist Diversified 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 Medalist Diversified Reit 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 Medalist Diversified i.e., Medalist Diversified and Presidio Property go up and down completely randomly.

Pair Corralation between Medalist Diversified and Presidio Property

Given the investment horizon of 90 days Medalist Diversified Reit is expected to generate 0.43 times more return on investment than Presidio Property. However, Medalist Diversified Reit is 2.34 times less risky than Presidio Property. It trades about 0.07 of its potential returns per unit of risk. Presidio Property Trust is currently generating about 0.01 per unit of risk. If you would invest  1,213  in Medalist Diversified Reit on December 2, 2024 and sell it today you would earn a total of  95.00  from holding Medalist Diversified Reit or generate 7.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.08%
Values	Daily Returns

Medalist Diversified Reit  vs.  Presidio Property Trust

Medalist Diversified Reit

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Medalist Diversified Reit are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Medalist Diversified may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Presidio Property Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days Presidio Property Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Presidio Property is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Medalist Diversified and Presidio Property

The main advantage of trading using opposite Medalist Diversified and Presidio Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medalist Diversified 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 Medalist Diversified Reit 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.