Correlation Between TSJA and ProShares Ultra

Can any of the company-specific risk be diversified away by investing in both TSJA 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 TSJA and ProShares Ultra into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between TSJA and ProShares Ultra Nasdaq, you can compare the effects of market volatilities on TSJA 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 TSJA with a short position of ProShares Ultra. Check out your portfolio center. Please also check ongoing floating volatility patterns of TSJA and ProShares Ultra.

Diversification Opportunities for TSJA and ProShares Ultra

-0.8

Correlation Coefficient

TSJA  ProShares Ultra

Pay attention - limited upside

The 3 months correlation between TSJA and ProShares is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding TSJA and ProShares Ultra Nasdaq in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Ultra Nasdaq and TSJA 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 TSJA 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 Nasdaq has no effect on the direction of TSJA i.e., TSJA and ProShares Ultra go up and down completely randomly.

Pair Corralation between TSJA and ProShares Ultra

If you would invest  5,354  in ProShares Ultra Nasdaq on February 7, 2024 and sell it today you would earn a total of  216.00  from holding ProShares Ultra Nasdaq or generate 4.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	4.55%
Values	Daily Returns

TSJA  vs.  ProShares Ultra Nasdaq

TSJA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TSJA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward-looking indicators, TSJA is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

ProShares Ultra Nasdaq

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ProShares Ultra Nasdaq has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward indicators, ProShares Ultra is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with TSJA and ProShares Ultra

The main advantage of trading using opposite TSJA and ProShares Ultra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TSJA 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 TSJA and ProShares Ultra Nasdaq 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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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.