Correlation Between ProShares Trust and UBS AG
Can any of the company-specific risk be diversified away by investing in both ProShares Trust and UBS AG 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 UBS AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Trust and UBS AG FI, you can compare the effects of market volatilities on ProShares Trust and UBS AG 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 UBS AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Trust and UBS AG.
Diversification Opportunities for ProShares Trust and UBS AG
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ProShares and UBS is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Trust and UBS AG FI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBS AG FI 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 UBS AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UBS AG FI has no effect on the direction of ProShares Trust i.e., ProShares Trust and UBS AG go up and down completely randomly.
Pair Corralation between ProShares Trust and UBS AG
Given the investment horizon of 90 days ProShares Trust is expected to generate 1.55 times more return on investment than UBS AG. However, ProShares Trust is 1.55 times more volatile than UBS AG FI. It trades about 0.2 of its potential returns per unit of risk. UBS AG FI is currently generating about -0.16 per unit of risk. If you would invest 789.00 in ProShares Trust on February 2, 2024 and sell it today you would earn a total of 116.00 from holding ProShares Trust or generate 14.7% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
ProShares Trust vs. UBS AG FI
Performance |
Timeline |
ProShares Trust |
UBS AG FI |
ProShares Trust and UBS AG Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ProShares Trust and UBS AG
The main advantage of trading using opposite ProShares Trust and UBS AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Trust position performs unexpectedly, UBS AG 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 UBS AG will offset losses from the drop in UBS AG's long position.ProShares Trust vs. AXS TSLA Bear | ProShares Trust vs. Tuttle Capital Short | ProShares Trust vs. ProShares Bitcoin Strategy | ProShares Trust vs. ProShares UltraShort Bloomberg |
UBS AG vs. First Trust Large | UBS AG vs. First Trust Small | UBS AG vs. First Trust Large | UBS AG vs. First Trust Mid |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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