Correlation Between ProShares Trust and Optimize Strategy
Can any of the company-specific risk be diversified away by investing in both ProShares Trust and Optimize Strategy 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 Optimize Strategy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Trust and Optimize Strategy Index, you can compare the effects of market volatilities on ProShares Trust and Optimize Strategy 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 Optimize Strategy. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Trust and Optimize Strategy.
Diversification Opportunities for ProShares Trust and Optimize Strategy
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between ProShares and Optimize is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Trust and Optimize Strategy Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Optimize Strategy Index 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 Optimize Strategy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Optimize Strategy Index has no effect on the direction of ProShares Trust i.e., ProShares Trust and Optimize Strategy go up and down completely randomly.
Pair Corralation between ProShares Trust and Optimize Strategy
Given the investment horizon of 90 days ProShares Trust is expected to under-perform the Optimize Strategy. In addition to that, ProShares Trust is 2.42 times more volatile than Optimize Strategy Index. It trades about -0.06 of its total potential returns per unit of risk. Optimize Strategy Index is currently generating about 0.16 per unit of volatility. If you would invest 2,975 in Optimize Strategy Index on November 9, 2024 and sell it today you would earn a total of 87.00 from holding Optimize Strategy Index or generate 2.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Trust vs. Optimize Strategy Index
Performance |
| Timeline |
| ProShares Trust |
| Optimize Strategy Index |
ProShares Trust and Optimize Strategy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Trust and Optimize Strategy
The main advantage of trading using opposite ProShares Trust and Optimize Strategy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Trust position performs unexpectedly, Optimize Strategy 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 Optimize Strategy will offset losses from the drop in Optimize Strategy'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 |
| Optimize Strategy vs. Freedom Day Dividend | Optimize Strategy vs. Franklin Templeton ETF | Optimize Strategy vs. iShares MSCI China | Optimize Strategy vs. Tidal Trust II |
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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