Correlation Between IShares High and Pershing Square
Can any of the company-specific risk be diversified away by investing in both IShares High and Pershing Square 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 IShares High and Pershing Square into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares High Yield and Pershing Square Holdings, you can compare the effects of market volatilities on IShares High and Pershing Square 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 IShares High with a short position of Pershing Square. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares High and Pershing Square.
Diversification Opportunities for IShares High and Pershing Square
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IShares and Pershing is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding iShares High Yield and Pershing Square Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pershing Square Holdings and IShares High 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 iShares High Yield are associated (or correlated) with Pershing Square. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pershing Square Holdings has no effect on the direction of IShares High i.e., IShares High and Pershing Square go up and down completely randomly.
Pair Corralation between IShares High and Pershing Square
Assuming the 90 days trading horizon iShares High Yield is expected to generate 0.48 times more return on investment than Pershing Square. However, iShares High Yield is 2.07 times less risky than Pershing Square. It trades about 0.38 of its potential returns per unit of risk. Pershing Square Holdings is currently generating about -0.08 per unit of risk. If you would invest 552.00 in iShares High Yield on August 27, 2024 and sell it today you would earn a total of 26.00 from holding iShares High Yield or generate 4.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares High Yield vs. Pershing Square Holdings
Performance |
| Timeline |
| iShares High Yield |
| Pershing Square Holdings |
IShares High and Pershing Square Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares High and Pershing Square
The main advantage of trading using opposite IShares High and Pershing Square positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares High position performs unexpectedly, Pershing Square 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 Pershing Square will offset losses from the drop in Pershing Square's long position.| IShares High vs. Vanguard SP 500 | IShares High vs. SPDR Dow Jones | IShares High vs. iShares SP 500 | IShares High vs. iShares China CNY |
| Pershing Square vs. Copa Holdings SA | Pershing Square vs. United Airlines Holdings | Pershing Square vs. Delta Air Lines | Pershing Square vs. SkyWest |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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