Correlation Between Barclays Capital and ProShares Ultra
Can any of the company-specific risk be diversified away by investing in both Barclays Capital 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 Barclays Capital and ProShares Ultra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barclays Capital and ProShares Ultra Euro, you can compare the effects of market volatilities on Barclays Capital 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 Barclays Capital with a short position of ProShares Ultra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barclays Capital and ProShares Ultra.
Diversification Opportunities for Barclays Capital and ProShares Ultra
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Barclays and ProShares is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Barclays Capital and ProShares Ultra Euro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Ultra Euro and Barclays Capital 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 Barclays Capital 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 Euro has no effect on the direction of Barclays Capital i.e., Barclays Capital and ProShares Ultra go up and down completely randomly.
Pair Corralation between Barclays Capital and ProShares Ultra
If you would invest 1,134 in ProShares Ultra Euro on January 27, 2024 and sell it today you would lose (11.00) from holding ProShares Ultra Euro or give up 0.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Barclays Capital vs. ProShares Ultra Euro
Performance |
| Timeline |
| Barclays Capital |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| ProShares Ultra Euro |
Barclays Capital and ProShares Ultra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barclays Capital and ProShares Ultra
The main advantage of trading using opposite Barclays Capital and ProShares Ultra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barclays Capital 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.The idea behind Barclays Capital and ProShares Ultra Euro 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.
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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