Correlation Between ProShares Trust and ProShares Short
Can any of the company-specific risk be diversified away by investing in both ProShares Trust and ProShares Short 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 ProShares Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Trust and ProShares Short MSCI, you can compare the effects of market volatilities on ProShares Trust and ProShares Short 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 ProShares Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Trust and ProShares Short.
Diversification Opportunities for ProShares Trust and ProShares Short
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ProShares and ProShares is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Trust and ProShares Short MSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Short MSCI 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 ProShares Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Short MSCI has no effect on the direction of ProShares Trust i.e., ProShares Trust and ProShares Short go up and down completely randomly.
Pair Corralation between ProShares Trust and ProShares Short
Given the investment horizon of 90 days ProShares Trust is expected to under-perform the ProShares Short. In addition to that, ProShares Trust is 4.04 times more volatile than ProShares Short MSCI. It trades about -0.11 of its total potential returns per unit of risk. ProShares Short MSCI is currently generating about -0.02 per unit of volatility. If you would invest 1,804 in ProShares Short MSCI on August 30, 2024 and sell it today you would lose (149.00) from holding ProShares Short MSCI or give up 8.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
ProShares Trust vs. ProShares Short MSCI
Performance |
| Timeline |
| ProShares Trust |
| ProShares Short MSCI |
ProShares Trust and ProShares Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Trust and ProShares Short
The main advantage of trading using opposite ProShares Trust and ProShares Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Trust position performs unexpectedly, ProShares Short 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 Short will offset losses from the drop in ProShares Short'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 |
| ProShares Short vs. AXS TSLA Bear | ProShares Short vs. ProShares Trust | ProShares Short 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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