Correlation Between ProShares Trust and SPDR Galaxy
Can any of the company-specific risk be diversified away by investing in both ProShares Trust and SPDR Galaxy 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 SPDR Galaxy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Trust and SPDR Galaxy Transformative, you can compare the effects of market volatilities on ProShares Trust and SPDR Galaxy 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 SPDR Galaxy. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Trust and SPDR Galaxy.
Diversification Opportunities for ProShares Trust and SPDR Galaxy
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ProShares and SPDR is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Trust and SPDR Galaxy Transformative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Galaxy Transfor 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 SPDR Galaxy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Galaxy Transfor has no effect on the direction of ProShares Trust i.e., ProShares Trust and SPDR Galaxy go up and down completely randomly.
Pair Corralation between ProShares Trust and SPDR Galaxy
Given the investment horizon of 90 days ProShares Trust is expected to under-perform the SPDR Galaxy. In addition to that, ProShares Trust is 1.27 times more volatile than SPDR Galaxy Transformative. It trades about -0.17 of its total potential returns per unit of risk. SPDR Galaxy Transformative is currently generating about 0.1 per unit of volatility. If you would invest 3,325 in SPDR Galaxy Transformative on September 18, 2024 and sell it today you would earn a total of 152.00 from holding SPDR Galaxy Transformative or generate 4.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
ProShares Trust vs. SPDR Galaxy Transformative
Performance |
| Timeline |
| ProShares Trust |
| SPDR Galaxy Transfor |
ProShares Trust and SPDR Galaxy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Trust and SPDR Galaxy
The main advantage of trading using opposite ProShares Trust and SPDR Galaxy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Trust position performs unexpectedly, SPDR Galaxy 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 SPDR Galaxy will offset losses from the drop in SPDR Galaxy's long position.| ProShares Trust vs. ProShares UltraShort Yen | ProShares Trust vs. ProShares Ultra Telecommunications | ProShares Trust vs. ProShares Ultra Consumer | ProShares Trust vs. ProShares Ultra Consumer |
| SPDR Galaxy vs. Invesco DWA Utilities | SPDR Galaxy vs. Invesco Dynamic Large | SPDR Galaxy vs. SCOR PK | SPDR Galaxy vs. Morningstar Unconstrained Allocation |
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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