Correlation Between Capital Income and ProShares Ultra
Can any of the company-specific risk be diversified away by investing in both Capital Income 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 Capital Income and ProShares Ultra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital Income Builder and ProShares Ultra Consumer, you can compare the effects of market volatilities on Capital Income 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 Capital Income with a short position of ProShares Ultra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Income and ProShares Ultra.
Diversification Opportunities for Capital Income and ProShares Ultra
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Capital and ProShares is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Capital Income Builder 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 Capital Income 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 Capital Income Builder 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 Capital Income i.e., Capital Income and ProShares Ultra go up and down completely randomly.
Pair Corralation between Capital Income and ProShares Ultra
Assuming the 90 days horizon Capital Income is expected to generate 3.94 times less return on investment than ProShares Ultra. But when comparing it to its historical volatility, Capital Income Builder is 4.38 times less risky than ProShares Ultra. It trades about 0.07 of its potential returns per unit of risk. ProShares Ultra Consumer is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 3,403 in ProShares Ultra Consumer on October 22, 2024 and sell it today you would earn a total of 1,969 from holding ProShares Ultra Consumer or generate 57.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capital Income Builder vs. ProShares Ultra Consumer
Performance |
| Timeline |
| Capital Income Builder |
| ProShares Ultra Consumer |
Capital Income and ProShares Ultra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital Income and ProShares Ultra
The main advantage of trading using opposite Capital Income and ProShares Ultra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Income 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.| Capital Income vs. Alternative Asset Allocation | Capital Income vs. Tax Managed Mid Small | Capital Income vs. Victory Incore Fund | Capital Income vs. Lord Abbett Diversified |
| 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |