Correlation Between Presidio Property and Armada Hoffler

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

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

Diversification Opportunities for Presidio Property and Armada Hoffler

-0.12

Correlation Coefficient

Presidio Property  Armada Hoffler

Good diversification

The 3 months correlation between Presidio and Armada is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Presidio Property Trust and Armada Hoffler Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Armada Hoffler Properties and Presidio Property 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 Presidio Property Trust are associated (or correlated) with Armada Hoffler. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Armada Hoffler Properties has no effect on the direction of Presidio Property i.e., Presidio Property and Armada Hoffler go up and down completely randomly.

Pair Corralation between Presidio Property and Armada Hoffler

Given the investment horizon of 90 days Presidio Property Trust is expected to generate 6.65 times more return on investment than Armada Hoffler. However, Presidio Property is 6.65 times more volatile than Armada Hoffler Properties. It trades about 0.01 of its potential returns per unit of risk. Armada Hoffler Properties is currently generating about -0.1 per unit of risk. If you would invest  71.00  in Presidio Property Trust on October 10, 2024 and sell it today you would lose (4.00) from holding Presidio Property Trust or give up 5.63% of portfolio value over 90 days.

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

Presidio Property Trust  vs.  Armada Hoffler Properties

Presidio Property Trust

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Presidio Property Trust are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Armada Hoffler Properties

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Armada Hoffler Properties has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical indicators, Armada Hoffler is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Presidio Property and Armada Hoffler

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

The idea behind Presidio Property Trust and Armada Hoffler 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..