Correlation Between ProShares Trust and ProShares Ultra
Can any of the company-specific risk be diversified away by investing in both ProShares Trust and ProShares Ultra 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 ProShares Ultra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Trust and ProShares Ultra Consumer, you can compare the effects of market volatilities on ProShares Trust and ProShares Ultra 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 ProShares Ultra. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Trust and ProShares Ultra.
Diversification Opportunities for ProShares Trust and ProShares Ultra
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ProShares and ProShares is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Trust and ProShares Ultra Consumer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Ultra Consumer 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 ProShares Ultra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Ultra Consumer has no effect on the direction of ProShares Trust i.e., ProShares Trust and ProShares Ultra go up and down completely randomly.
Pair Corralation between ProShares Trust and ProShares Ultra
Given the investment horizon of 90 days ProShares Trust is expected to under-perform the ProShares Ultra. In addition to that, ProShares Trust is 1.36 times more volatile than ProShares Ultra Consumer. It trades about -0.07 of its total potential returns per unit of risk. ProShares Ultra Consumer is currently generating about 0.24 per unit of volatility. If you would invest 5,035 in ProShares Ultra Consumer on November 3, 2024 and sell it today you would earn a total of 491.00 from holding ProShares Ultra Consumer or generate 9.75% 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. ProShares Ultra Consumer
Performance |
| Timeline |
| ProShares Trust |
| ProShares Ultra Consumer |
ProShares Trust and ProShares Ultra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Trust and ProShares Ultra
The main advantage of trading using opposite ProShares Trust and ProShares Ultra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Trust position performs unexpectedly, ProShares Ultra 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 ProShares Ultra will offset losses from the drop in ProShares Ultra'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 |
| ProShares Ultra vs. ProShares Ultra Consumer | ProShares Ultra vs. ProShares Ultra Industrials | ProShares Ultra vs. ProShares Ultra Utilities | ProShares Ultra vs. ProShares Ultra Health |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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