Correlation Between Presidio Property and XOMA Corp
Can any of the company-specific risk be diversified away by investing in both Presidio Property and XOMA Corp 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 XOMA Corp 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 XOMA Corp, you can compare the effects of market volatilities on Presidio Property and XOMA Corp 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 XOMA Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Presidio Property and XOMA Corp.
Diversification Opportunities for Presidio Property and XOMA Corp
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Presidio and XOMA is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Presidio Property Trust and XOMA Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XOMA Corp 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 XOMA Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XOMA Corp has no effect on the direction of Presidio Property i.e., Presidio Property and XOMA Corp go up and down completely randomly.
Pair Corralation between Presidio Property and XOMA Corp
Assuming the 90 days horizon Presidio Property Trust is expected to generate 1.0 times more return on investment than XOMA Corp. However, Presidio Property Trust is 1.0 times less risky than XOMA Corp. It trades about 0.01 of its potential returns per unit of risk. XOMA Corp is currently generating about -0.09 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 2.00 from holding Presidio Property Trust or generate 0.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Presidio Property Trust vs. XOMA Corp
Performance |
| Timeline |
| Presidio Property Trust |
| XOMA Corp |
Presidio Property and XOMA Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Presidio Property and XOMA Corp
The main advantage of trading using opposite Presidio Property and XOMA Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Presidio Property position performs unexpectedly, XOMA Corp 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 XOMA Corp will offset losses from the drop in XOMA Corp's long position.| Presidio Property vs. FAT Brands | Presidio Property vs. Atlanticus Holdings Corp | Presidio Property vs. Presidio Property Trust |
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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