Correlation Between ProShares Trust and Motley Fool
Can any of the company-specific risk be diversified away by investing in both ProShares Trust and Motley Fool 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 Motley Fool into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Trust and Motley Fool Next, you can compare the effects of market volatilities on ProShares Trust and Motley Fool 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 Motley Fool. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Trust and Motley Fool.
Diversification Opportunities for ProShares Trust and Motley Fool
-0.94 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ProShares and Motley is -0.94. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Trust and Motley Fool Next in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Motley Fool 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 Motley Fool. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Motley Fool Next has no effect on the direction of ProShares Trust i.e., ProShares Trust and Motley Fool go up and down completely randomly.
Pair Corralation between ProShares Trust and Motley Fool
Given the investment horizon of 90 days ProShares Trust is expected to under-perform the Motley Fool. In addition to that, ProShares Trust is 3.4 times more volatile than Motley Fool Next. It trades about -0.08 of its total potential returns per unit of risk. Motley Fool Next is currently generating about 0.14 per unit of volatility. If you would invest 1,706 in Motley Fool Next on August 29, 2024 and sell it today you would earn a total of 358.00 from holding Motley Fool Next or generate 20.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Trust vs. Motley Fool Next
Performance |
| Timeline |
| ProShares Trust |
| Motley Fool Next |
ProShares Trust and Motley Fool Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Trust and Motley Fool
The main advantage of trading using opposite ProShares Trust and Motley Fool positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Trust position performs unexpectedly, Motley Fool 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 Motley Fool will offset losses from the drop in Motley Fool'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 |
| Motley Fool vs. BlackRock Future Health | Motley Fool vs. Global X Thematic | Motley Fool vs. Aquagold International | Motley Fool 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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