Correlation Between Presidio Property and Great Elm

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

Diversification Opportunities for Presidio Property and Great Elm

-0.2

Correlation Coefficient

Presidio Property  Great Elm

Good diversification

The 3 months correlation between Presidio and Great is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Presidio Property Trust and Great Elm Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Elm Capital 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 Great Elm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Elm Capital has no effect on the direction of Presidio Property i.e., Presidio Property and Great Elm go up and down completely randomly.

Pair Corralation between Presidio Property and Great Elm

Given the investment horizon of 90 days Presidio Property Trust is expected to under-perform the Great Elm. In addition to that, Presidio Property is 2.76 times more volatile than Great Elm Capital. It trades about -0.1 of its total potential returns per unit of risk. Great Elm Capital is currently generating about -0.01 per unit of volatility. If you would invest  1,057  in Great Elm Capital on December 29, 2024 and sell it today you would lose (17.00) from holding Great Elm Capital or give up 1.61% 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.  Great Elm Capital

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 weak performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Great Elm Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Great Elm Capital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Great Elm is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Presidio Property and Great Elm

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

The idea behind Presidio Property Trust and Great Elm Capital 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.