Correlation Between Presidio Property and Gladstone Commercial

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

Diversification Opportunities for Presidio Property and Gladstone Commercial

-0.21

Correlation Coefficient

Presidio Property  Gladstone Commercial

Very good diversification

The 3 months correlation between Presidio and Gladstone is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Presidio Property Trust and Gladstone Commercial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gladstone Commercial 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 Gladstone Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gladstone Commercial Corp has no effect on the direction of Presidio Property i.e., Presidio Property and Gladstone Commercial go up and down completely randomly.

Pair Corralation between Presidio Property and Gladstone Commercial

Given the investment horizon of 90 days Presidio Property Trust is expected to generate 7.97 times more return on investment than Gladstone Commercial. However, Presidio Property is 7.97 times more volatile than Gladstone Commercial Corp. It trades about 0.05 of its potential returns per unit of risk. Gladstone Commercial Corp is currently generating about 0.12 per unit of risk. If you would invest  72.00  in Presidio Property Trust on September 14, 2024 and sell it today you would earn a total of  6.00  from holding Presidio Property Trust or generate 8.33% 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.  Gladstone Commercial Corp

Presidio Property Trust

Risk-Adjusted Performance

3 of 100

Insignificant

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.

Gladstone Commercial Corp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gladstone Commercial Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Gladstone Commercial is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Presidio Property and Gladstone Commercial

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

The idea behind Presidio Property Trust and Gladstone Commercial Corp 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.

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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.