Correlation Between SCOM and ProShares UltraShort
Can any of the company-specific risk be diversified away by investing in both SCOM and ProShares UltraShort 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 UltraShort into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCOM and ProShares UltraShort SP500, you can compare the effects of market volatilities on SCOM and ProShares UltraShort 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 UltraShort. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCOM and ProShares UltraShort.
Diversification Opportunities for SCOM and ProShares UltraShort
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 UltraShort SP500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares UltraShort 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 UltraShort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares UltraShort has no effect on the direction of SCOM i.e., SCOM and ProShares UltraShort go up and down completely randomly.
Pair Corralation between SCOM and ProShares UltraShort
If you would invest 2,488 in ProShares UltraShort SP500 on January 21, 2024 and sell it today you would earn a total of 302.00 from holding ProShares UltraShort SP500 or generate 12.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
SCOM vs. ProShares UltraShort SP500
Performance |
| Timeline |
| SCOM |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| ProShares UltraShort |
SCOM and ProShares UltraShort Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCOM and ProShares UltraShort
The main advantage of trading using opposite SCOM and ProShares UltraShort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCOM position performs unexpectedly, ProShares UltraShort 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 UltraShort will offset losses from the drop in ProShares UltraShort's long position.| SCOM vs. ProShares Ultra SP500 | SCOM vs. HUMANA INC | SCOM vs. Aquagold International | SCOM vs. Thrivent High Yield |
| ProShares UltraShort vs. ProShares Ultra SP500 | ProShares UltraShort vs. HUMANA INC | ProShares UltraShort vs. Aquagold International | ProShares UltraShort vs. Thrivent High Yield |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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