Correlation Between Pershing Square and BE Semiconductor

Can any of the company-specific risk be diversified away by investing in both Pershing Square and BE Semiconductor 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 BE Semiconductor 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 BE Semiconductor Industries, you can compare the effects of market volatilities on Pershing Square and BE Semiconductor 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 BE Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pershing Square and BE Semiconductor.

Diversification Opportunities for Pershing Square and BE Semiconductor

0.09

Correlation Coefficient

Pershing Square  BE Semiconductor

Significant diversification

The 3 months correlation between Pershing and BESI is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Pershing Square Holdings and BE Semiconductor Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BE Semiconductor Ind 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 BE Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BE Semiconductor Ind has no effect on the direction of Pershing Square i.e., Pershing Square and BE Semiconductor go up and down completely randomly.

Pair Corralation between Pershing Square and BE Semiconductor

Assuming the 90 days trading horizon Pershing Square Holdings is not expected to generate positive returns. However, Pershing Square Holdings is 45.8 times less risky than BE Semiconductor. It waists most of its returns potential to compensate for thr risk taken. BE Semiconductor is generating about 0.22 per unit of risk. If you would invest  9,106  in BE Semiconductor Industries on April 20, 2025 and sell it today you would earn a total of  3,689  from holding BE Semiconductor Industries or generate 40.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Pershing Square Holdings  vs.  BE Semiconductor Industries

Pershing Square Holdings

Risk-Adjusted Performance

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.

BE Semiconductor Ind

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in BE Semiconductor Industries are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, BE Semiconductor unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pershing Square and BE Semiconductor

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

The idea behind Pershing Square Holdings and BE Semiconductor Industries 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.