Correlation Between ProShares Trust and IShares Global
Can any of the company-specific risk be diversified away by investing in both ProShares Trust and IShares Global 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 Trust and IShares Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Trust and iShares Global Industrials, you can compare the effects of market volatilities on ProShares Trust and IShares Global 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 Trust with a short position of IShares Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Trust and IShares Global.
Diversification Opportunities for ProShares Trust and IShares Global
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ProShares and IShares is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Trust and iShares Global Industrials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Global Indus and ProShares Trust 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 Trust are associated (or correlated) with IShares Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Global Indus has no effect on the direction of ProShares Trust i.e., ProShares Trust and IShares Global go up and down completely randomly.
Pair Corralation between ProShares Trust and IShares Global
Given the investment horizon of 90 days ProShares Trust is expected to under-perform the IShares Global. In addition to that, ProShares Trust is 3.37 times more volatile than iShares Global Industrials. It trades about -0.08 of its total potential returns per unit of risk. iShares Global Industrials is currently generating about 0.06 per unit of volatility. If you would invest 10,352 in iShares Global Industrials on February 23, 2024 and sell it today you would earn a total of 3,543 from holding iShares Global Industrials or generate 34.23% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 97.59% |
Values | Daily Returns |
ProShares Trust vs. iShares Global Industrials
Performance |
Timeline |
ProShares Trust |
iShares Global Indus |
ProShares Trust and IShares Global Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ProShares Trust and IShares Global
The main advantage of trading using opposite ProShares Trust and IShares Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Trust position performs unexpectedly, IShares Global 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 IShares Global will offset losses from the drop in IShares Global's long position.ProShares Trust vs. ProShares UltraPro Short | ProShares Trust vs. ProShares Short VIX | ProShares Trust vs. ProShares UltraPro QQQ |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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