Correlation Between ProShares Trust and Virtus WMC
Can any of the company-specific risk be diversified away by investing in both ProShares Trust and Virtus WMC 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 Virtus WMC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Trust and Virtus WMC International, you can compare the effects of market volatilities on ProShares Trust and Virtus WMC 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 Virtus WMC. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Trust and Virtus WMC.
Diversification Opportunities for ProShares Trust and Virtus WMC
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ProShares and Virtus is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Trust and Virtus WMC International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus WMC International 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 Virtus WMC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus WMC International has no effect on the direction of ProShares Trust i.e., ProShares Trust and Virtus WMC go up and down completely randomly.
Pair Corralation between ProShares Trust and Virtus WMC
Given the investment horizon of 90 days ProShares Trust is expected to generate 5.29 times more return on investment than Virtus WMC. However, ProShares Trust is 5.29 times more volatile than Virtus WMC International. It trades about 0.13 of its potential returns per unit of risk. Virtus WMC International is currently generating about -0.09 per unit of risk. If you would invest 6,050 in ProShares Trust on October 24, 2024 and sell it today you would earn a total of 2,406 from holding ProShares Trust or generate 39.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Trust vs. Virtus WMC International
Performance |
| Timeline |
| ProShares Trust |
| Virtus WMC International |
ProShares Trust and Virtus WMC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Trust and Virtus WMC
The main advantage of trading using opposite ProShares Trust and Virtus WMC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Trust position performs unexpectedly, Virtus WMC 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 Virtus WMC will offset losses from the drop in Virtus WMC'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 |
| Virtus WMC vs. Franklin Templeton ETF | Virtus WMC vs. Altrius Global Dividend | Virtus WMC vs. Invesco Exchange Traded | Virtus WMC vs. Franklin International Core |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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