Correlation Between ProShares UltraPro and BHARTI

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

By analyzing existing cross correlation between ProShares UltraPro QQQ and BHARTI 565, you can compare the effects of market volatilities on ProShares UltraPro and BHARTI 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 UltraPro with a short position of BHARTI. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares UltraPro and BHARTI.

Diversification Opportunities for ProShares UltraPro and BHARTI

-0.14

Correlation Coefficient

ProShares UltraPro  BHARTI

Good diversification

The 3 months correlation between ProShares and BHARTI is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding ProShares UltraPro QQQ and BHARTI 565 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BHARTI 565 and ProShares UltraPro 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 UltraPro QQQ are associated (or correlated) with BHARTI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BHARTI 565 has no effect on the direction of ProShares UltraPro i.e., ProShares UltraPro and BHARTI go up and down completely randomly.

Pair Corralation between ProShares UltraPro and BHARTI

Given the investment horizon of 90 days ProShares UltraPro QQQ is expected to generate 1.08 times more return on investment than BHARTI. However, ProShares UltraPro is 1.08 times more volatile than BHARTI 565. It trades about -0.05 of its potential returns per unit of risk. BHARTI 565 is currently generating about -0.45 per unit of risk. If you would invest  7,130  in ProShares UltraPro QQQ on June 18, 2024 and sell it today you would lose (395.00) from holding ProShares UltraPro QQQ or give up 5.54% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	25.0%
Values	Daily Returns

ProShares UltraPro QQQ  vs.  BHARTI 565

ProShares UltraPro QQQ

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ProShares UltraPro QQQ has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Etf's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the ETF retail investors.

BHARTI 565

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BHARTI 565 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in October 2024. The current disturbance may also be a sign of long term up-swing for BHARTI 565 investors.

Pair Trading with ProShares UltraPro and BHARTI

The main advantage of trading using opposite ProShares UltraPro and BHARTI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares UltraPro position performs unexpectedly, BHARTI 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 BHARTI will offset losses from the drop in BHARTI's long position.

The idea behind ProShares UltraPro QQQ and BHARTI 565 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..