Correlation Between ProShares Ultra and ProShares Short
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and ProShares Short 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 Ultra and ProShares Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Ultra SP500 and ProShares Short Dow30, you can compare the effects of market volatilities on ProShares Ultra and ProShares Short 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 Ultra with a short position of ProShares Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and ProShares Short.
Diversification Opportunities for ProShares Ultra and ProShares Short
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ProShares and ProShares is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra SP500 and ProShares Short Dow30 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Short Dow30 and ProShares Ultra 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 Ultra SP500 are associated (or correlated) with ProShares Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Short Dow30 has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and ProShares Short go up and down completely randomly.
Pair Corralation between ProShares Ultra and ProShares Short
Considering the 90-day investment horizon ProShares Ultra SP500 is expected to under-perform the ProShares Short. In addition to that, ProShares Ultra is 2.58 times more volatile than ProShares Short Dow30. It trades about -0.23 of its total potential returns per unit of risk. ProShares Short Dow30 is currently generating about 0.25 per unit of volatility. If you would invest 2,849 in ProShares Short Dow30 on January 31, 2024 and sell it today you would earn a total of 103.00 from holding ProShares Short Dow30 or generate 3.62% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
ProShares Ultra SP500 vs. ProShares Short Dow30
Performance |
Timeline |
ProShares Ultra SP500 |
ProShares Short Dow30 |
ProShares Ultra and ProShares Short Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ProShares Ultra and ProShares Short
The main advantage of trading using opposite ProShares Ultra and ProShares Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, ProShares Short 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 Short will offset losses from the drop in ProShares Short's long position.ProShares Ultra vs. ProShares Ultra QQQ | ProShares Ultra vs. ProShares Ultra Dow30 | ProShares Ultra vs. ProShares UltraShort SP500 | ProShares Ultra vs. ProShares Ultra Financials |
ProShares Short vs. ProShares Short QQQ | ProShares Short vs. ProShares Short SP500 | ProShares Short vs. ProShares UltraShort Dow30 | ProShares Short vs. ProShares Short Russell2000 |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
Bonds Directory Find actively traded corporate debentures issued by US companies | |
Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
Equity Valuation Check real value of public entities based on technical and fundamental data | |
Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
Transaction History View history of all your transactions and understand their impact on performance | |
Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |