Correlation Between Vanguard Total and ProShares Short
Can any of the company-specific risk be diversified away by investing in both Vanguard Total and ProShares Short 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 Vanguard Total and ProShares Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Total Bond and ProShares Short 20, you can compare the effects of market volatilities on Vanguard Total and ProShares Short 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 Vanguard Total with a short position of ProShares Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Total and ProShares Short.
Diversification Opportunities for Vanguard Total and ProShares Short
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Vanguard and ProShares is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Total Bond and ProShares Short 20 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Short 20 and Vanguard Total 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 Vanguard Total Bond are associated (or correlated) with ProShares Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Short 20 has no effect on the direction of Vanguard Total i.e., Vanguard Total and ProShares Short go up and down completely randomly.
Pair Corralation between Vanguard Total and ProShares Short
Considering the 90-day investment horizon Vanguard Total Bond is expected to generate 0.36 times more return on investment than ProShares Short. However, Vanguard Total Bond is 2.8 times less risky than ProShares Short. It trades about 0.19 of its potential returns per unit of risk. ProShares Short 20 is currently generating about -0.13 per unit of risk. If you would invest 7,172 in Vanguard Total Bond on November 18, 2024 and sell it today you would earn a total of 81.00 from holding Vanguard Total Bond or generate 1.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Total Bond vs. ProShares Short 20
Performance |
| Timeline |
| Vanguard Total Bond |
| ProShares Short 20 |
Vanguard Total and ProShares Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Total and ProShares Short
The main advantage of trading using opposite Vanguard Total and ProShares Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Total position performs unexpectedly, ProShares Short 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 Short will offset losses from the drop in ProShares Short's long position.| Vanguard Total vs. Vanguard Total International | Vanguard Total vs. Vanguard Total International | Vanguard Total vs. Vanguard Total Stock | Vanguard Total vs. Vanguard Real Estate |
| ProShares Short vs. ProShares Short 7 10 | ProShares Short vs. Direxion Daily 20 | ProShares Short vs. ProShares UltraShort 7 10 | ProShares Short vs. ProShares UltraShort 20 |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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