Correlation Between ProShares Trust and IShares MSCI
Can any of the company-specific risk be diversified away by investing in both ProShares Trust and IShares MSCI 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 MSCI 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 MSCI South, you can compare the effects of market volatilities on ProShares Trust and IShares MSCI 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 MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Trust and IShares MSCI.
Diversification Opportunities for ProShares Trust and IShares MSCI
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ProShares and IShares is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Trust and iShares MSCI South in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI South 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 MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares MSCI South has no effect on the direction of ProShares Trust i.e., ProShares Trust and IShares MSCI go up and down completely randomly.
Pair Corralation between ProShares Trust and IShares MSCI
Given the investment horizon of 90 days ProShares Trust is expected to generate 1.33 times more return on investment than IShares MSCI. However, ProShares Trust is 1.33 times more volatile than iShares MSCI South. It trades about 0.22 of its potential returns per unit of risk. iShares MSCI South is currently generating about 0.13 per unit of risk. If you would invest 2,119 in ProShares Trust on November 18, 2024 and sell it today you would earn a total of 171.00 from holding ProShares Trust or generate 8.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Trust vs. iShares MSCI South
Performance |
| Timeline |
| ProShares Trust |
| iShares MSCI South |
ProShares Trust and IShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Trust and IShares MSCI
The main advantage of trading using opposite ProShares Trust and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Trust position performs unexpectedly, IShares MSCI 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 MSCI will offset losses from the drop in IShares MSCI'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 |
| IShares MSCI vs. iShares MSCI Taiwan | IShares MSCI vs. iShares MSCI Singapore | IShares MSCI vs. iShares MSCI Mexico | IShares MSCI vs. iShares MSCI Hong |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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