Correlation Between Presidio Property and Capital One
Can any of the company-specific risk be diversified away by investing in both Presidio Property and Capital One 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 Capital One 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 Capital One Financial, you can compare the effects of market volatilities on Presidio Property and Capital One 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 Capital One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Presidio Property and Capital One.
Diversification Opportunities for Presidio Property and Capital One
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Presidio and Capital is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Presidio Property Trust and Capital One Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital One Financial 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 Capital One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital One Financial has no effect on the direction of Presidio Property i.e., Presidio Property and Capital One go up and down completely randomly.
Pair Corralation between Presidio Property and Capital One
Assuming the 90 days horizon Presidio Property is expected to generate 1.87 times less return on investment than Capital One. In addition to that, Presidio Property is 1.84 times more volatile than Capital One Financial. It trades about 0.01 of its total potential returns per unit of risk. Capital One Financial is currently generating about 0.04 per unit of volatility. If you would invest 1,657 in Capital One Financial on September 12, 2024 and sell it today you would earn a total of 359.00 from holding Capital One Financial or generate 21.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Presidio Property Trust vs. Capital One Financial
Performance |
| Timeline |
| Presidio Property Trust |
| Capital One Financial |
Presidio Property and Capital One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Presidio Property and Capital One
The main advantage of trading using opposite Presidio Property and Capital One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Presidio Property position performs unexpectedly, Capital One 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 Capital One will offset losses from the drop in Capital One's long position.| Presidio Property vs. FAT Brands | Presidio Property vs. Atlanticus Holdings Corp | Presidio Property vs. Presidio Property Trust |
| Capital One vs. Babcock Wilcox Enterprises | Capital One vs. XOMA Corporation | Capital One vs. Brighthouse Financial | Capital One 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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