Correlation Between Bear Profund and Profunds Ultrashort
Can any of the company-specific risk be diversified away by investing in both Bear Profund and Profunds Ultrashort 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 Bear Profund and Profunds Ultrashort into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bear Profund Bear and Profunds Ultrashort Nasdaq 100, you can compare the effects of market volatilities on Bear Profund and Profunds Ultrashort 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 Bear Profund with a short position of Profunds Ultrashort. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bear Profund and Profunds Ultrashort.
Diversification Opportunities for Bear Profund and Profunds Ultrashort
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bear and Profunds is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Bear Profund Bear and Profunds Ultrashort Nasdaq 100 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Profunds Ultrashort and Bear Profund 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 Bear Profund Bear are associated (or correlated) with Profunds Ultrashort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Profunds Ultrashort has no effect on the direction of Bear Profund i.e., Bear Profund and Profunds Ultrashort go up and down completely randomly.
Pair Corralation between Bear Profund and Profunds Ultrashort
Assuming the 90 days horizon Bear Profund Bear is expected to generate 0.36 times more return on investment than Profunds Ultrashort. However, Bear Profund Bear is 2.76 times less risky than Profunds Ultrashort. It trades about -0.13 of its potential returns per unit of risk. Profunds Ultrashort Nasdaq 100 is currently generating about -0.12 per unit of risk. If you would invest 1,050 in Bear Profund Bear on August 24, 2024 and sell it today you would lose (25.00) from holding Bear Profund Bear or give up 2.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bear Profund Bear vs. Profunds Ultrashort Nasdaq 100
Performance |
| Timeline |
| Bear Profund Bear |
| Profunds Ultrashort |
Bear Profund and Profunds Ultrashort Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bear Profund and Profunds Ultrashort
The main advantage of trading using opposite Bear Profund and Profunds Ultrashort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bear Profund position performs unexpectedly, Profunds Ultrashort 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 Profunds Ultrashort will offset losses from the drop in Profunds Ultrashort's long position.| Bear Profund vs. Blackrock Financial Institutions | Bear Profund vs. Royce Global Financial | Bear Profund vs. Angel Oak Financial | Bear Profund vs. Gabelli Global Financial |
| Profunds Ultrashort vs. Old Westbury Short Term | Profunds Ultrashort vs. Extended Market Index | Profunds Ultrashort vs. Semiconductor Ultrasector Profund | Profunds Ultrashort vs. Pnc Emerging Markets |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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