Correlation Between Presidio Property and Re Max

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

Diversification Opportunities for Presidio Property and Re Max

0.19

Correlation Coefficient

Presidio Property  Re Max

Average diversification

The 3 months correlation between Presidio and RMAX is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Presidio Property Trust and Re Max Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Re Max Holding 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 Re Max. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Re Max Holding has no effect on the direction of Presidio Property i.e., Presidio Property and Re Max go up and down completely randomly.

Pair Corralation between Presidio Property and Re Max

Given the investment horizon of 90 days Presidio Property is expected to generate 1.2 times less return on investment than Re Max. In addition to that, Presidio Property is 1.31 times more volatile than Re Max Holding. It trades about 0.05 of its total potential returns per unit of risk. Re Max Holding is currently generating about 0.08 per unit of volatility. If you would invest  1,124  in Re Max Holding on September 2, 2024 and sell it today you would earn a total of  192.00  from holding Re Max Holding or generate 17.08% 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.  Re Max Holding

Presidio Property Trust

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Presidio Property Trust are ranked lower than 4 (%) 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.

Re Max Holding

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Re Max Holding are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Re Max showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Presidio Property and Re Max

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

The idea behind Presidio Property Trust and Re Max Holding 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.