Correlation Between ProShares Trust and IShares
Can any of the company-specific risk be diversified away by investing in both ProShares Trust and IShares 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 IShares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Trust and IShares, you can compare the effects of market volatilities on ProShares Trust and IShares 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 IShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Trust and IShares.
Diversification Opportunities for ProShares Trust and IShares
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ProShares and IShares is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Trust and IShares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IShares 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 IShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IShares has no effect on the direction of ProShares Trust i.e., ProShares Trust and IShares go up and down completely randomly.
Pair Corralation between ProShares Trust and IShares
If you would invest 2,922 in IShares on September 1, 2024 and sell it today you would earn a total of 0.00 from holding IShares or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 4.76% |
| Values | Daily Returns |
ProShares Trust vs. IShares
Performance |
| Timeline |
| ProShares Trust |
| IShares |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ProShares Trust and IShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Trust and IShares
The main advantage of trading using opposite ProShares Trust and IShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Trust position performs unexpectedly, IShares 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 IShares will offset losses from the drop in IShares' long position.| ProShares Trust vs. AXS TSLA Bear | ProShares Trust vs. Tuttle Capital Short | ProShares Trust vs. ProShares Bitcoin Strategy | ProShares Trust vs. ProShares UltraShort Bloomberg |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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