Correlation Between ProShares Trust and ProShares Ultra
Can any of the company-specific risk be diversified away by investing in both ProShares Trust 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 ProShares Trust and ProShares Ultra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Trust and ProShares Ultra VIX, you can compare the effects of market volatilities on ProShares Trust 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 ProShares Trust with a short position of ProShares Ultra. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Trust and ProShares Ultra.
Diversification Opportunities for ProShares Trust and ProShares Ultra
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ProShares and ProShares is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Trust and ProShares Ultra VIX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Ultra VIX 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 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 VIX has no effect on the direction of ProShares Trust i.e., ProShares Trust and ProShares Ultra go up and down completely randomly.
Pair Corralation between ProShares Trust and ProShares Ultra
Given the investment horizon of 90 days ProShares Trust is expected to generate 0.58 times more return on investment than ProShares Ultra. However, ProShares Trust is 1.71 times less risky than ProShares Ultra. It trades about 0.09 of its potential returns per unit of risk. ProShares Ultra VIX is currently generating about -0.07 per unit of risk. If you would invest 8,064 in ProShares Trust on October 24, 2024 and sell it today you would earn a total of 391.50 from holding ProShares Trust or generate 4.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 94.74% |
| Values | Daily Returns |
ProShares Trust vs. ProShares Ultra VIX
Performance |
| Timeline |
| ProShares Trust |
| ProShares Ultra VIX |
ProShares Trust and ProShares Ultra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Trust and ProShares Ultra
The main advantage of trading using opposite ProShares Trust and ProShares Ultra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Trust 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.| ProShares Trust vs. ProShares Trust | ProShares Trust vs. iShares Ethereum Trust | ProShares Trust vs. ProShares Trust | ProShares Trust vs. Grayscale Ethereum Trust |
| ProShares Ultra vs. ProShares UltraPro Short | ProShares Ultra vs. ProShares Short VIX | ProShares Ultra vs. iPath Series B | ProShares Ultra vs. ProShares UltraPro QQQ |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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