Correlation Between Ford and Presidio Property
Can any of the company-specific risk be diversified away by investing in both Ford 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 Ford and Presidio Property into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Presidio Property Trust, you can compare the effects of market volatilities on Ford 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 Ford with a short position of Presidio Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Presidio Property.
Diversification Opportunities for Ford and Presidio Property
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ford and Presidio is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor 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 Ford 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 Ford Motor 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 Ford i.e., Ford and Presidio Property go up and down completely randomly.
Pair Corralation between Ford and Presidio Property
Taking into account the 90-day investment horizon Ford Motor is expected to generate 2.12 times more return on investment than Presidio Property. However, Ford is 2.12 times more volatile than Presidio Property Trust. It trades about 0.17 of its potential returns per unit of risk. Presidio Property Trust is currently generating about 0.02 per unit of risk. If you would invest 1,033 in Ford Motor on August 31, 2024 and sell it today you would earn a total of 77.00 from holding Ford Motor or generate 7.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ford Motor vs. Presidio Property Trust
Performance |
| Timeline |
| Ford Motor |
| Presidio Property Trust |
Ford and Presidio Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Presidio Property
The main advantage of trading using opposite Ford and Presidio Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford 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 Ford Motor 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.| Presidio Property vs. FAT Brands | Presidio Property vs. Atlanticus Holdings Corp | Presidio Property vs. Presidio Property Trust |
Check out your portfolio center.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.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |