Correlation Between Linea Directa and Pershing Square

Can any of the company-specific risk be diversified away by investing in both Linea Directa 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 Linea Directa and Pershing Square into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Linea Directa Aseguradora and Pershing Square Holdings, you can compare the effects of market volatilities on Linea Directa 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 Linea Directa with a short position of Pershing Square. Check out your portfolio center. Please also check ongoing floating volatility patterns of Linea Directa and Pershing Square.

Diversification Opportunities for Linea Directa and Pershing Square

0.0

Correlation Coefficient

Linea Directa  Pershing Square

Pay attention - limited upside

The 3 months correlation between Linea and Pershing is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Linea Directa Aseguradora 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 Linea Directa 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 Linea Directa Aseguradora 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 Linea Directa i.e., Linea Directa and Pershing Square go up and down completely randomly.

Pair Corralation between Linea Directa and Pershing Square

If you would invest  0.00  in Pershing Square Holdings on August 30, 2024 and sell it today you would earn a total of  0.00  from holding Pershing Square Holdings or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Linea Directa Aseguradora  vs.  Pershing Square Holdings

Linea Directa Aseguradora

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Linea Directa Aseguradora has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Linea Directa is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pershing Square Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pershing Square Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical indicators, Pershing Square is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Linea Directa and Pershing Square

The main advantage of trading using opposite Linea Directa and Pershing Square positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Linea Directa 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.

The idea behind Linea Directa Aseguradora and Pershing Square Holdings 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.