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 London, 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
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ProShares and UBS is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Trust and UBS AG London in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBS AG London 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 London 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 10.08 times less return on investment than UBS AG. In addition to that, ProShares Trust is 2.33 times more volatile than UBS AG London. It trades about 0.01 of its total potential returns per unit of risk. UBS AG London is currently generating about 0.25 per unit of volatility. If you would invest 1,879 in UBS AG London on November 3, 2024 and sell it today you would earn a total of 133.00 from holding UBS AG London or generate 7.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Trust vs. UBS AG London
Performance |
| Timeline |
| ProShares Trust |
| UBS AG London |
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. ProShares Trust | ProShares Trust vs. iShares Ethereum Trust | ProShares Trust vs. ProShares Trust | ProShares Trust vs. Grayscale Ethereum Trust |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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