Correlation Between Presidio Property and PennantPark Investment
Can any of the company-specific risk be diversified away by investing in both Presidio Property and PennantPark Investment 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 PennantPark Investment 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 PennantPark Investment, you can compare the effects of market volatilities on Presidio Property and PennantPark Investment 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 PennantPark Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Presidio Property and PennantPark Investment.
Diversification Opportunities for Presidio Property and PennantPark Investment
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Presidio and PennantPark is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Presidio Property Trust and PennantPark Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PennantPark Investment 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 PennantPark Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PennantPark Investment has no effect on the direction of Presidio Property i.e., Presidio Property and PennantPark Investment go up and down completely randomly.
Pair Corralation between Presidio Property and PennantPark Investment
Given the investment horizon of 90 days Presidio Property is expected to generate 3.3 times less return on investment than PennantPark Investment. In addition to that, Presidio Property is 3.91 times more volatile than PennantPark Investment. It trades about 0.01 of its total potential returns per unit of risk. PennantPark Investment is currently generating about 0.07 per unit of volatility. If you would invest 451.00 in PennantPark Investment on August 30, 2024 and sell it today you would earn a total of 224.00 from holding PennantPark Investment or generate 49.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Presidio Property Trust vs. PennantPark Investment
Performance |
| Timeline |
| Presidio Property Trust |
| PennantPark Investment |
Presidio Property and PennantPark Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Presidio Property and PennantPark Investment
The main advantage of trading using opposite Presidio Property and PennantPark Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Presidio Property position performs unexpectedly, PennantPark Investment 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 PennantPark Investment will offset losses from the drop in PennantPark Investment's long position.| Presidio Property vs. Investcorp Credit Management | Presidio Property vs. Medalist Diversified Reit | Presidio Property vs. Mingzhu Logistics Holdings |
| PennantPark Investment vs. Sixth Street Specialty | PennantPark Investment vs. New Mountain Finance | PennantPark Investment vs. Carlyle Secured Lending | PennantPark Investment vs. BlackRock TCP Capital |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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