Correlation Between Global Net and Presidio Property
Can any of the company-specific risk be diversified away by investing in both Global Net 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 Global Net and Presidio Property into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Net Lease and Presidio Property Trust, you can compare the effects of market volatilities on Global Net 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 Global Net with a short position of Presidio Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Net and Presidio Property.
Diversification Opportunities for Global Net and Presidio Property
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Global and Presidio is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Global Net Lease 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 Global Net 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 Global Net Lease 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 Global Net i.e., Global Net and Presidio Property go up and down completely randomly.
Pair Corralation between Global Net and Presidio Property
Assuming the 90 days trading horizon Global Net is expected to generate 1.96 times less return on investment than Presidio Property. But when comparing it to its historical volatility, Global Net Lease is 1.03 times less risky than Presidio Property. It trades about 0.02 of its potential returns per unit of risk. Presidio Property Trust is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,439 in Presidio Property Trust on August 30, 2024 and sell it today you would earn a total of 11.00 from holding Presidio Property Trust or generate 0.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Net Lease vs. Presidio Property Trust
Performance |
| Timeline |
| Global Net Lease |
| Presidio Property Trust |
Global Net and Presidio Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Net and Presidio Property
The main advantage of trading using opposite Global Net and Presidio Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Net 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.| Global Net vs. Timken Company | Global Net vs. Inter Parfums | Global Net vs. Genfit | Global Net vs. Vera Bradley |
| Presidio Property vs. SiriusPoint | Presidio Property vs. RLJ Lodging Trust | Presidio Property vs. ARMOUR Residential REIT | Presidio Property vs. Sachem Capital Corp |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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