Correlation Between Volatility Shares and ProShares UltraPro
Can any of the company-specific risk be diversified away by investing in both Volatility Shares and ProShares UltraPro 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 Volatility Shares and ProShares UltraPro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Volatility Shares Trust and ProShares UltraPro Short, you can compare the effects of market volatilities on Volatility Shares and ProShares UltraPro 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 Volatility Shares with a short position of ProShares UltraPro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Volatility Shares and ProShares UltraPro.
Diversification Opportunities for Volatility Shares and ProShares UltraPro
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Volatility and ProShares is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Volatility Shares Trust and ProShares UltraPro Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares UltraPro Short and Volatility Shares 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 Volatility Shares Trust are associated (or correlated) with ProShares UltraPro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares UltraPro Short has no effect on the direction of Volatility Shares i.e., Volatility Shares and ProShares UltraPro go up and down completely randomly.
Pair Corralation between Volatility Shares and ProShares UltraPro
Given the investment horizon of 90 days Volatility Shares Trust is expected to under-perform the ProShares UltraPro. In addition to that, Volatility Shares is 1.59 times more volatile than ProShares UltraPro Short. It trades about -0.29 of its total potential returns per unit of risk. ProShares UltraPro Short is currently generating about 0.26 per unit of volatility. If you would invest 1,743 in ProShares UltraPro Short on November 28, 2024 and sell it today you would earn a total of 286.00 from holding ProShares UltraPro Short or generate 16.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Volatility Shares Trust vs. ProShares UltraPro Short
Performance |
| Timeline |
| Volatility Shares Trust |
| ProShares UltraPro Short |
Volatility Shares and ProShares UltraPro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Volatility Shares and ProShares UltraPro
The main advantage of trading using opposite Volatility Shares and ProShares UltraPro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Volatility Shares position performs unexpectedly, ProShares UltraPro 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 UltraPro will offset losses from the drop in ProShares UltraPro's long position.| Volatility Shares vs. Grayscale Funds Trust | Volatility Shares vs. ProShares Trust | Volatility Shares vs. iShares Ethereum Trust | Volatility Shares vs. ProShares Trust |
| ProShares UltraPro vs. Dimensional ETF Trust | ProShares UltraPro vs. Vanguard Small Cap Index | ProShares UltraPro vs. First Trust Multi Manager | ProShares UltraPro vs. Vanguard SP Small Cap |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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