Correlation Between ProShares Trust and KraneShares SSE
Can any of the company-specific risk be diversified away by investing in both ProShares Trust and KraneShares SSE 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 KraneShares SSE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Trust and KraneShares SSE STAR, you can compare the effects of market volatilities on ProShares Trust and KraneShares SSE 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 KraneShares SSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Trust and KraneShares SSE.
Diversification Opportunities for ProShares Trust and KraneShares SSE
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ProShares and KraneShares is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Trust and KraneShares SSE STAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares SSE STAR 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 KraneShares SSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KraneShares SSE STAR has no effect on the direction of ProShares Trust i.e., ProShares Trust and KraneShares SSE go up and down completely randomly.
Pair Corralation between ProShares Trust and KraneShares SSE
Given the investment horizon of 90 days ProShares Trust is expected to under-perform the KraneShares SSE. In addition to that, ProShares Trust is 1.05 times more volatile than KraneShares SSE STAR. It trades about -0.11 of its total potential returns per unit of risk. KraneShares SSE STAR is currently generating about 0.01 per unit of volatility. If you would invest 1,515 in KraneShares SSE STAR on September 4, 2024 and sell it today you would lose (146.00) from holding KraneShares SSE STAR or give up 9.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
ProShares Trust vs. KraneShares SSE STAR
Performance |
| Timeline |
| ProShares Trust |
| KraneShares SSE STAR |
ProShares Trust and KraneShares SSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Trust and KraneShares SSE
The main advantage of trading using opposite ProShares Trust and KraneShares SSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Trust position performs unexpectedly, KraneShares SSE 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 KraneShares SSE will offset losses from the drop in KraneShares SSE'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 |
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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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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