Correlation Between Presidio Property and CTO Realty

Can any of the company-specific risk be diversified away by investing in both Presidio Property and CTO Realty 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 CTO Realty 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 CTO Realty Growth, you can compare the effects of market volatilities on Presidio Property and CTO Realty 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 CTO Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Presidio Property and CTO Realty.

Diversification Opportunities for Presidio Property and CTO Realty

-0.09

Correlation Coefficient

Presidio Property  CTO Realty

Good diversification

The 3 months correlation between Presidio and CTO is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Presidio Property Trust and CTO Realty Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTO Realty Growth 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 CTO Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTO Realty Growth has no effect on the direction of Presidio Property i.e., Presidio Property and CTO Realty go up and down completely randomly.

Pair Corralation between Presidio Property and CTO Realty

Given the investment horizon of 90 days Presidio Property Trust is expected to generate 5.62 times more return on investment than CTO Realty. However, Presidio Property is 5.62 times more volatile than CTO Realty Growth. It trades about 0.05 of its potential returns per unit of risk. CTO Realty Growth is currently generating about 0.11 per unit of risk. If you would invest  69.00  in Presidio Property Trust on September 13, 2024 and sell it today you would earn a total of  6.00  from holding Presidio Property Trust or generate 8.7% 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.  CTO Realty Growth

Presidio Property Trust

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Presidio Property Trust are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, Presidio Property unveiled solid returns over the last few months and may actually be approaching a breakup point.

CTO Realty Growth

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CTO Realty Growth are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, CTO Realty may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Presidio Property and CTO Realty

The main advantage of trading using opposite Presidio Property and CTO Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Presidio Property position performs unexpectedly, CTO Realty 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 CTO Realty will offset losses from the drop in CTO Realty's long position.

The idea behind Presidio Property Trust and CTO Realty Growth pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.