Correlation Between ProShares UltraShort and ProShares UltraShort
Can any of the company-specific risk be diversified away by investing in both ProShares UltraShort 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 ProShares UltraShort and ProShares UltraShort into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares UltraShort SP500 and ProShares UltraShort Dow30, you can compare the effects of market volatilities on ProShares UltraShort 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 ProShares UltraShort with a short position of ProShares UltraShort. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares UltraShort and ProShares UltraShort.
Diversification Opportunities for ProShares UltraShort and ProShares UltraShort
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ProShares and ProShares is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding ProShares UltraShort SP500 and ProShares UltraShort Dow30 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares UltraShort 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 SP500 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 ProShares UltraShort i.e., ProShares UltraShort and ProShares UltraShort go up and down completely randomly.
Pair Corralation between ProShares UltraShort and ProShares UltraShort
Considering the 90-day investment horizon ProShares UltraShort SP500 is expected to generate 1.24 times more return on investment than ProShares UltraShort. However, ProShares UltraShort is 1.24 times more volatile than ProShares UltraShort Dow30. It trades about -0.03 of its potential returns per unit of risk. ProShares UltraShort Dow30 is currently generating about -0.13 per unit of risk. If you would invest 2,580 in ProShares UltraShort SP500 on February 10, 2024 and sell it today you would lose (39.00) from holding ProShares UltraShort SP500 or give up 1.51% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
ProShares UltraShort SP500 vs. ProShares UltraShort Dow30
Performance |
Timeline |
ProShares UltraShort |
ProShares UltraShort |
ProShares UltraShort and ProShares UltraShort Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ProShares UltraShort and ProShares UltraShort
The main advantage of trading using opposite ProShares UltraShort and ProShares UltraShort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares UltraShort 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.ProShares UltraShort vs. HUMANA INC | ProShares UltraShort vs. Aquagold International | ProShares UltraShort vs. Barloworld Ltd ADR | ProShares UltraShort vs. Morningstar Unconstrained Allocation |
ProShares UltraShort vs. HUMANA INC | ProShares UltraShort vs. Aquagold International | ProShares UltraShort vs. Barloworld Ltd ADR | ProShares UltraShort vs. Morningstar Unconstrained Allocation |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |