Correlation Between ProShares Trust and Tradr 2X
Can any of the company-specific risk be diversified away by investing in both ProShares Trust and Tradr 2X 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 Tradr 2X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Trust and Tradr 2X Long, you can compare the effects of market volatilities on ProShares Trust and Tradr 2X 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 Tradr 2X. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Trust and Tradr 2X.
Diversification Opportunities for ProShares Trust and Tradr 2X
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ProShares and Tradr is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Trust and Tradr 2X Long in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tradr 2X Long 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 Tradr 2X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tradr 2X Long has no effect on the direction of ProShares Trust i.e., ProShares Trust and Tradr 2X go up and down completely randomly.
Pair Corralation between ProShares Trust and Tradr 2X
Given the investment horizon of 90 days ProShares Trust is expected to under-perform the Tradr 2X. In addition to that, ProShares Trust is 1.67 times more volatile than Tradr 2X Long. It trades about -0.05 of its total potential returns per unit of risk. Tradr 2X Long is currently generating about 0.12 per unit of volatility. If you would invest 2,618 in Tradr 2X Long on November 4, 2024 and sell it today you would earn a total of 100.00 from holding Tradr 2X Long or generate 3.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Trust vs. Tradr 2X Long
Performance |
| Timeline |
| ProShares Trust |
| Tradr 2X Long |
ProShares Trust and Tradr 2X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Trust and Tradr 2X
The main advantage of trading using opposite ProShares Trust and Tradr 2X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Trust position performs unexpectedly, Tradr 2X 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 Tradr 2X will offset losses from the drop in Tradr 2X'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 |
| Tradr 2X vs. ProShares Ultra SP500 | Tradr 2X vs. Direxion Daily SP500 | Tradr 2X vs. ProShares Ultra QQQ | Tradr 2X vs. ProShares UltraPro SP500 |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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