Correlation Between Presidio Property and Ammo Preferred

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

Diversification Opportunities for Presidio Property and Ammo Preferred

0.6

Correlation Coefficient

Presidio Property  Ammo Preferred

Poor diversification

The 3 months correlation between Presidio and Ammo is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Presidio Property Trust and Ammo Preferred in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ammo Preferred 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 Ammo Preferred. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ammo Preferred has no effect on the direction of Presidio Property i.e., Presidio Property and Ammo Preferred go up and down completely randomly.

Pair Corralation between Presidio Property and Ammo Preferred

Assuming the 90 days horizon Presidio Property Trust is expected to generate 0.41 times more return on investment than Ammo Preferred. However, Presidio Property Trust is 2.42 times less risky than Ammo Preferred. It trades about -0.08 of its potential returns per unit of risk. Ammo Preferred is currently generating about -0.05 per unit of risk. If you would invest  1,517  in Presidio Property Trust on September 4, 2024 and sell it today you would lose (147.00) from holding Presidio Property Trust or give up 9.69% of portfolio value over 90 days.

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

Presidio Property Trust  vs.  Ammo Preferred

Presidio Property Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Presidio Property Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Preferred Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Ammo Preferred

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ammo Preferred has generated negative risk-adjusted returns adding no value to investors with long positions. Even with abnormal performance in the last few months, the Preferred Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Presidio Property and Ammo Preferred

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

The idea behind Presidio Property Trust and Ammo Preferred 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.