Correlation Between Ascent Solar and ProShares Ultra
Can any of the company-specific risk be diversified away by investing in both Ascent Solar 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 Ascent Solar and ProShares Ultra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ascent Solar Technologies, and ProShares Ultra MidCap400, you can compare the effects of market volatilities on Ascent Solar 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 Ascent Solar with a short position of ProShares Ultra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ascent Solar and ProShares Ultra.
Diversification Opportunities for Ascent Solar and ProShares Ultra
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ascent and ProShares is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Ascent Solar Technologies, and ProShares Ultra MidCap400 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Ultra MidCap400 and Ascent Solar 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 Ascent Solar Technologies, 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 MidCap400 has no effect on the direction of Ascent Solar i.e., Ascent Solar and ProShares Ultra go up and down completely randomly.
Pair Corralation between Ascent Solar and ProShares Ultra
Given the investment horizon of 90 days Ascent Solar Technologies, is expected to under-perform the ProShares Ultra. In addition to that, Ascent Solar is 4.43 times more volatile than ProShares Ultra MidCap400. It trades about -0.14 of its total potential returns per unit of risk. ProShares Ultra MidCap400 is currently generating about 0.05 per unit of volatility. If you would invest 4,560 in ProShares Ultra MidCap400 on December 1, 2024 and sell it today you would earn a total of 2,057 from holding ProShares Ultra MidCap400 or generate 45.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Ascent Solar Technologies, vs. ProShares Ultra MidCap400
Performance |
| Timeline |
| Ascent Solar Technol |
| ProShares Ultra MidCap400 |
Ascent Solar and ProShares Ultra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ascent Solar and ProShares Ultra
The main advantage of trading using opposite Ascent Solar and ProShares Ultra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ascent Solar 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.| Ascent Solar vs. PPL Corporation | ||
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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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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