Correlation Between ProShares Trust and Invesco NASDAQ
Can any of the company-specific risk be diversified away by investing in both ProShares Trust and Invesco NASDAQ 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 NASDAQ 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 NASDAQ Next, you can compare the effects of market volatilities on ProShares Trust and Invesco NASDAQ 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 NASDAQ. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Trust and Invesco NASDAQ.
Diversification Opportunities for ProShares Trust and Invesco NASDAQ
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ProShares and Invesco is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Trust and Invesco NASDAQ Next in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco NASDAQ Next 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 NASDAQ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco NASDAQ Next has no effect on the direction of ProShares Trust i.e., ProShares Trust and Invesco NASDAQ go up and down completely randomly.
Pair Corralation between ProShares Trust and Invesco NASDAQ
Given the investment horizon of 90 days ProShares Trust is expected to under-perform the Invesco NASDAQ. In addition to that, ProShares Trust is 3.46 times more volatile than Invesco NASDAQ Next. It trades about -0.11 of its total potential returns per unit of risk. Invesco NASDAQ Next is currently generating about 0.06 per unit of volatility. If you would invest 2,425 in Invesco NASDAQ Next on August 31, 2024 and sell it today you would earn a total of 777.00 from holding Invesco NASDAQ Next or generate 32.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
ProShares Trust vs. Invesco NASDAQ Next
Performance |
| Timeline |
| ProShares Trust |
| Invesco NASDAQ Next |
ProShares Trust and Invesco NASDAQ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Trust and Invesco NASDAQ
The main advantage of trading using opposite ProShares Trust and Invesco NASDAQ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Trust position performs unexpectedly, Invesco NASDAQ 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 NASDAQ will offset losses from the drop in Invesco NASDAQ'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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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