Correlation Between SCOM and ProShares Short
Can any of the company-specific risk be diversified away by investing in both SCOM and ProShares Short 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 SCOM and ProShares Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCOM and ProShares Short MSCI, you can compare the effects of market volatilities on SCOM and ProShares Short 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 SCOM with a short position of ProShares Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCOM and ProShares Short.
Diversification Opportunities for SCOM and ProShares Short
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SCOM and ProShares is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SCOM and ProShares Short MSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Short MSCI and SCOM 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 SCOM are associated (or correlated) with ProShares Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Short MSCI has no effect on the direction of SCOM i.e., SCOM and ProShares Short go up and down completely randomly.
Pair Corralation between SCOM and ProShares Short
If you would invest 1,445 in ProShares Short MSCI on January 27, 2024 and sell it today you would lose (30.00) from holding ProShares Short MSCI or give up 2.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
SCOM vs. ProShares Short MSCI
Performance |
| Timeline |
| SCOM |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| ProShares Short MSCI |
SCOM and ProShares Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCOM and ProShares Short
The main advantage of trading using opposite SCOM and ProShares Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCOM position performs unexpectedly, ProShares Short 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 ProShares Short will offset losses from the drop in ProShares Short's long position.The idea behind SCOM and ProShares Short MSCI 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.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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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