Correlation Between ProShares Trust and Global X
Can any of the company-specific risk be diversified away by investing in both ProShares Trust and Global X 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 Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Trust and Global X Blockchain, you can compare the effects of market volatilities on ProShares Trust and Global X 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 Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Trust and Global X.
Diversification Opportunities for ProShares Trust and Global X
-0.96 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ProShares and Global is -0.96. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Trust and Global X Blockchain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Blockchain 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 Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Blockchain has no effect on the direction of ProShares Trust i.e., ProShares Trust and Global X go up and down completely randomly.
Pair Corralation between ProShares Trust and Global X
Given the investment horizon of 90 days ProShares Trust is expected to under-perform the Global X. But the etf apears to be less risky and, when comparing its historical volatility, ProShares Trust is 1.4 times less risky than Global X. The etf trades about -0.11 of its potential returns per unit of risk. The Global X Blockchain is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,650 in Global X Blockchain on August 23, 2024 and sell it today you would earn a total of 4,988 from holding Global X Blockchain or generate 302.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Trust vs. Global X Blockchain
Performance |
| Timeline |
| ProShares Trust |
| Global X Blockchain |
ProShares Trust and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Trust and Global X
The main advantage of trading using opposite ProShares Trust and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Trust position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.| ProShares Trust vs. Invesco DB Dollar | ProShares Trust vs. iPath Series B | ProShares Trust vs. ProShares VIX Short Term | ProShares Trust vs. ProShares VIX Mid Term |
| Global X vs. Vanguard Industrials Index | Global X vs. Vanguard Consumer Discretionary | Global X vs. Vanguard Materials Index | Global X vs. Vanguard Health Care |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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