Correlation Between ProShares Trust and Invesco China
Can any of the company-specific risk be diversified away by investing in both ProShares Trust and Invesco China 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 Invesco China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Trust and Invesco China Technology, you can compare the effects of market volatilities on ProShares Trust and Invesco China 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 Invesco China. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Trust and Invesco China.
Diversification Opportunities for ProShares Trust and Invesco China
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ProShares and Invesco is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Trust and Invesco China Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco China Technology 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 Invesco China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco China Technology has no effect on the direction of ProShares Trust i.e., ProShares Trust and Invesco China go up and down completely randomly.
Pair Corralation between ProShares Trust and Invesco China
Given the investment horizon of 90 days ProShares Trust is expected to under-perform the Invesco China. In addition to that, ProShares Trust is 1.32 times more volatile than Invesco China Technology. It trades about -0.07 of its total potential returns per unit of risk. Invesco China Technology is currently generating about 0.05 per unit of volatility. If you would invest 3,538 in Invesco China Technology on September 3, 2024 and sell it today you would earn a total of 519.00 from holding Invesco China Technology or generate 14.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Trust vs. Invesco China Technology
Performance |
| Timeline |
| ProShares Trust |
| Invesco China Technology |
ProShares Trust and Invesco China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Trust and Invesco China
The main advantage of trading using opposite ProShares Trust and Invesco China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Trust position performs unexpectedly, Invesco China 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 Invesco China will offset losses from the drop in Invesco China's 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 |
| Invesco China vs. Franklin FTSE South | Invesco China vs. Franklin FTSE Japan | Invesco China vs. Franklin FTSE India | Invesco China vs. Franklin FTSE Brazil |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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