Correlation Between ProShares UltraShort and LACK
Can any of the company-specific risk be diversified away by investing in both ProShares UltraShort and LACK 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 ProShares UltraShort and LACK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares UltraShort SmallCap600 and LACK, you can compare the effects of market volatilities on ProShares UltraShort and LACK 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 ProShares UltraShort with a short position of LACK. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares UltraShort and LACK.
Diversification Opportunities for ProShares UltraShort and LACK
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ProShares and LACK is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ProShares UltraShort SmallCap6 and LACK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LACK and ProShares UltraShort 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 ProShares UltraShort SmallCap600 are associated (or correlated) with LACK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LACK has no effect on the direction of ProShares UltraShort i.e., ProShares UltraShort and LACK go up and down completely randomly.
Pair Corralation between ProShares UltraShort and LACK
If you would invest 1,846 in ProShares UltraShort SmallCap600 on January 20, 2024 and sell it today you would earn a total of 216.00 from holding ProShares UltraShort SmallCap600 or generate 11.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
ProShares UltraShort SmallCap6 vs. LACK
Performance |
| Timeline |
| ProShares UltraShort |
| LACK |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ProShares UltraShort and LACK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares UltraShort and LACK
The main advantage of trading using opposite ProShares UltraShort and LACK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares UltraShort position performs unexpectedly, LACK 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 LACK will offset losses from the drop in LACK's long position.| ProShares UltraShort vs. ProShares Ultra SP500 | ProShares UltraShort vs. HUMANA INC | ProShares UltraShort vs. Aquagold International | ProShares UltraShort vs. Thrivent High Yield |
| LACK vs. ProShares Ultra SP500 | LACK vs. HUMANA INC | LACK vs. Aquagold International | LACK 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 AI Investment Finder module to use AI to screen and filter profitable investment opportunities.
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