Correlation Between Presidio Property and Medalist Diversified

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

Diversification Opportunities for Presidio Property and Medalist Diversified

0.21

Correlation Coefficient

Presidio Property  Medalist Diversified

Modest diversification

The 3 months correlation between Presidio and Medalist is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Presidio Property Trust and Medalist Diversified Reit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medalist Diversified Reit 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 Medalist Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medalist Diversified Reit has no effect on the direction of Presidio Property i.e., Presidio Property and Medalist Diversified go up and down completely randomly.

Pair Corralation between Presidio Property and Medalist Diversified

Given the investment horizon of 90 days Presidio Property Trust is expected to generate 2.76 times more return on investment than Medalist Diversified. However, Presidio Property is 2.76 times more volatile than Medalist Diversified Reit. It trades about 0.03 of its potential returns per unit of risk. Medalist Diversified Reit is currently generating about 0.04 per unit of risk. If you would invest  77.00  in Presidio Property Trust on October 13, 2024 and sell it today you would lose (2.00) from holding Presidio Property Trust or give up 2.6% of portfolio value over 90 days.

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

Presidio Property Trust  vs.  Medalist Diversified Reit

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 weak technical and fundamental indicators, Presidio Property unveiled solid returns over the last few months and may actually be approaching a breakup point.

Medalist Diversified Reit

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Medalist Diversified Reit are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Medalist Diversified 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 Presidio Property and Medalist Diversified

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

The idea behind Presidio Property Trust and Medalist Diversified Reit 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.