Correlation Between Presidio Property and Babcock Wilcox
Can any of the company-specific risk be diversified away by investing in both Presidio Property and Babcock Wilcox 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 Babcock Wilcox 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 Babcock Wilcox Enterprises, you can compare the effects of market volatilities on Presidio Property and Babcock Wilcox 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 Babcock Wilcox. Check out your portfolio center. Please also check ongoing floating volatility patterns of Presidio Property and Babcock Wilcox.
Diversification Opportunities for Presidio Property and Babcock Wilcox
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Presidio and Babcock is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Presidio Property Trust and Babcock Wilcox Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Babcock Wilcox Enter 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 Babcock Wilcox. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Babcock Wilcox Enter has no effect on the direction of Presidio Property i.e., Presidio Property and Babcock Wilcox go up and down completely randomly.
Pair Corralation between Presidio Property and Babcock Wilcox
Assuming the 90 days horizon Presidio Property Trust is expected to generate 0.35 times more return on investment than Babcock Wilcox. However, Presidio Property Trust is 2.83 times less risky than Babcock Wilcox. It trades about 0.03 of its potential returns per unit of risk. Babcock Wilcox Enterprises is currently generating about -0.05 per unit of risk. If you would invest 1,443 in Presidio Property Trust on August 28, 2024 and sell it today you would earn a total of 7.00 from holding Presidio Property Trust or generate 0.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Presidio Property Trust vs. Babcock Wilcox Enterprises
Performance |
| Timeline |
| Presidio Property Trust |
| Babcock Wilcox Enter |
Presidio Property and Babcock Wilcox Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Presidio Property and Babcock Wilcox
The main advantage of trading using opposite Presidio Property and Babcock Wilcox positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Presidio Property position performs unexpectedly, Babcock Wilcox 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 Babcock Wilcox will offset losses from the drop in Babcock Wilcox's long position.| Presidio Property vs. FAT Brands | Presidio Property vs. Atlanticus Holdings Corp | Presidio Property vs. Presidio Property Trust |
| Babcock Wilcox vs. Atlanticus Holdings Corp | Babcock Wilcox vs. Costamare | Babcock Wilcox vs. Alta Equipment Group | Babcock Wilcox vs. Global Ship Lease |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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