Correlation Between BlackRock ETF and ProShares
Can any of the company-specific risk be diversified away by investing in both BlackRock ETF and ProShares 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 BlackRock ETF and ProShares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BlackRock ETF Trust and ProShares SP 500, you can compare the effects of market volatilities on BlackRock ETF and ProShares 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 BlackRock ETF with a short position of ProShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock ETF and ProShares.
Diversification Opportunities for BlackRock ETF and ProShares
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BlackRock and ProShares is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock ETF Trust and ProShares SP 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares SP 500 and BlackRock ETF 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 BlackRock ETF Trust are associated (or correlated) with ProShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares SP 500 has no effect on the direction of BlackRock ETF i.e., BlackRock ETF and ProShares go up and down completely randomly.
Pair Corralation between BlackRock ETF and ProShares
Given the investment horizon of 90 days BlackRock ETF is expected to generate 2.59 times less return on investment than ProShares. But when comparing it to its historical volatility, BlackRock ETF Trust is 4.64 times less risky than ProShares. It trades about 0.25 of its potential returns per unit of risk. ProShares SP 500 is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 9,702 in ProShares SP 500 on August 29, 2024 and sell it today you would earn a total of 1,111 from holding ProShares SP 500 or generate 11.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BlackRock ETF Trust vs. ProShares SP 500
Performance |
| Timeline |
| BlackRock ETF Trust |
| ProShares SP 500 |
BlackRock ETF and ProShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BlackRock ETF and ProShares
The main advantage of trading using opposite BlackRock ETF and ProShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlackRock ETF position performs unexpectedly, ProShares 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 will offset losses from the drop in ProShares' long position.| BlackRock ETF vs. BlackRock ETF Trust | BlackRock ETF vs. Aris Water Solutions | BlackRock ETF vs. Pacer Cash Cows |
| ProShares vs. iShares Core Dividend | ProShares vs. SPDR SP Dividend | ProShares vs. Invesco SP 500 | ProShares vs. Vanguard Dividend Appreciation |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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