Correlation Between Pershing Square and VanEck AEX
Can any of the company-specific risk be diversified away by investing in both Pershing Square and VanEck AEX 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 Pershing Square and VanEck AEX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pershing Square Holdings and VanEck AEX UCITS, you can compare the effects of market volatilities on Pershing Square and VanEck AEX 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 Pershing Square with a short position of VanEck AEX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pershing Square and VanEck AEX.
Diversification Opportunities for Pershing Square and VanEck AEX
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pershing and VanEck is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Pershing Square Holdings and VanEck AEX UCITS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck AEX UCITS and Pershing Square 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 Pershing Square Holdings are associated (or correlated) with VanEck AEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck AEX UCITS has no effect on the direction of Pershing Square i.e., Pershing Square and VanEck AEX go up and down completely randomly.
Pair Corralation between Pershing Square and VanEck AEX
Assuming the 90 days trading horizon Pershing Square Holdings is expected to generate 1.72 times more return on investment than VanEck AEX. However, Pershing Square is 1.72 times more volatile than VanEck AEX UCITS. It trades about 0.07 of its potential returns per unit of risk. VanEck AEX UCITS is currently generating about 0.07 per unit of risk. If you would invest 3,463 in Pershing Square Holdings on August 31, 2024 and sell it today you would earn a total of 1,327 from holding Pershing Square Holdings or generate 38.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pershing Square Holdings vs. VanEck AEX UCITS
Performance |
| Timeline |
| Pershing Square Holdings |
| VanEck AEX UCITS |
Pershing Square and VanEck AEX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pershing Square and VanEck AEX
The main advantage of trading using opposite Pershing Square and VanEck AEX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pershing Square position performs unexpectedly, VanEck AEX 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 VanEck AEX will offset losses from the drop in VanEck AEX's long position.| Pershing Square vs. Pershing Square Holdings | Pershing Square vs. Universal Music Group | Pershing Square vs. Hydratec Industries NV | Pershing Square vs. BlackRock ESG Multi Asset |
| VanEck AEX vs. iShares Core MSCI | VanEck AEX vs. BlackRock ESG Multi Asset | VanEck AEX vs. Pershing Square Holdings | VanEck AEX vs. ASML Holding NV |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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