Correlation Between AlphaMark Actively and ProShares Ultra
Can any of the company-specific risk be diversified away by investing in both AlphaMark Actively and ProShares Ultra 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 AlphaMark Actively and ProShares Ultra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AlphaMark Actively Managed and ProShares Ultra SmallCap600, you can compare the effects of market volatilities on AlphaMark Actively and ProShares Ultra 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 AlphaMark Actively with a short position of ProShares Ultra. Check out your portfolio center. Please also check ongoing floating volatility patterns of AlphaMark Actively and ProShares Ultra.
Diversification Opportunities for AlphaMark Actively and ProShares Ultra
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AlphaMark and ProShares is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding AlphaMark Actively Managed and ProShares Ultra SmallCap600 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Ultra Smal and AlphaMark Actively 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 AlphaMark Actively Managed are associated (or correlated) with ProShares Ultra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Ultra Smal has no effect on the direction of AlphaMark Actively i.e., AlphaMark Actively and ProShares Ultra go up and down completely randomly.
Pair Corralation between AlphaMark Actively and ProShares Ultra
Given the investment horizon of 90 days AlphaMark Actively Managed is expected to generate 0.44 times more return on investment than ProShares Ultra. However, AlphaMark Actively Managed is 2.3 times less risky than ProShares Ultra. It trades about -0.22 of its potential returns per unit of risk. ProShares Ultra SmallCap600 is currently generating about -0.22 per unit of risk. If you would invest 3,071 in AlphaMark Actively Managed on January 20, 2024 and sell it today you would lose (146.00) from holding AlphaMark Actively Managed or give up 4.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AlphaMark Actively Managed vs. ProShares Ultra SmallCap600
Performance |
| Timeline |
| AlphaMark Actively |
| ProShares Ultra Smal |
AlphaMark Actively and ProShares Ultra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AlphaMark Actively and ProShares Ultra
The main advantage of trading using opposite AlphaMark Actively and ProShares Ultra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AlphaMark Actively position performs unexpectedly, ProShares Ultra 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 Ultra will offset losses from the drop in ProShares Ultra's long position.| AlphaMark Actively vs. Vanguard Mid Cap Index | AlphaMark Actively vs. Vanguard Small Cap Value | AlphaMark Actively vs. Vanguard FTSE Emerging | AlphaMark Actively vs. Vanguard Large Cap Index |
| ProShares Ultra vs. ProShares Ultra MidCap400 | ProShares Ultra vs. ProShares Ultra Industrials | ProShares Ultra vs. ProShares Ultra Consumer | ProShares Ultra vs. ProShares Ultra Consumer |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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