Correlation Between HAL Trust and Pershing Square
Can any of the company-specific risk be diversified away by investing in both HAL Trust 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 HAL Trust and Pershing Square into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HAL Trust and Pershing Square Holdings, you can compare the effects of market volatilities on HAL Trust 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 HAL Trust with a short position of Pershing Square. Check out your portfolio center. Please also check ongoing floating volatility patterns of HAL Trust and Pershing Square.
Diversification Opportunities for HAL Trust and Pershing Square
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between HAL and Pershing is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding HAL Trust 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 HAL Trust 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 HAL Trust 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 HAL Trust i.e., HAL Trust and Pershing Square go up and down completely randomly.
Pair Corralation between HAL Trust and Pershing Square
Assuming the 90 days trading horizon HAL Trust is not expected to generate positive returns. However, HAL Trust is 1.28 times less risky than Pershing Square. It waists most of its returns potential to compensate for thr risk taken. Pershing Square is generating about 0.05 per unit of risk. If you would invest 3,408 in Pershing Square Holdings on August 27, 2024 and sell it today you would earn a total of 1,162 from holding Pershing Square Holdings or generate 34.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.22% |
| Values | Daily Returns |
HAL Trust vs. Pershing Square Holdings
Performance |
| Timeline |
| HAL Trust |
| Pershing Square Holdings |
HAL Trust and Pershing Square Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HAL Trust and Pershing Square
The main advantage of trading using opposite HAL Trust and Pershing Square positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HAL Trust 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.| HAL Trust vs. Ackermans Van Haaren | HAL Trust vs. Koninklijke Vopak NV | HAL Trust vs. Groep Brussel Lambert | HAL Trust vs. Sofina Socit Anonyme |
| 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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