Correlation Between Citizens and ProShares UltraShort
Can any of the company-specific risk be diversified away by investing in both Citizens and ProShares 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 Citizens and ProShares UltraShort into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citizens and ProShares UltraShort Gold, you can compare the effects of market volatilities on Citizens and ProShares 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 Citizens with a short position of ProShares UltraShort. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens and ProShares UltraShort.
Diversification Opportunities for Citizens and ProShares UltraShort
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citizens and ProShares is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Citizens and ProShares UltraShort Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares UltraShort Gold and Citizens 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 Citizens are associated (or correlated) with ProShares UltraShort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares UltraShort Gold has no effect on the direction of Citizens i.e., Citizens and ProShares UltraShort go up and down completely randomly.
Pair Corralation between Citizens and ProShares UltraShort
Considering the 90-day investment horizon Citizens is expected to generate 1.85 times more return on investment than ProShares UltraShort. However, Citizens is 1.85 times more volatile than ProShares UltraShort Gold. It trades about 0.05 of its potential returns per unit of risk. ProShares UltraShort Gold is currently generating about -0.12 per unit of risk. If you would invest 483.00 in Citizens on December 4, 2024 and sell it today you would earn a total of 13.00 from holding Citizens or generate 2.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Citizens vs. ProShares UltraShort Gold
Performance |
| Timeline |
| Citizens |
| ProShares UltraShort Gold |
Citizens and ProShares UltraShort Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citizens and ProShares UltraShort
The main advantage of trading using opposite Citizens and ProShares UltraShort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens position performs unexpectedly, ProShares 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 ProShares UltraShort will offset losses from the drop in ProShares UltraShort's long position.| Citizens vs. CNO Financial Group | ||
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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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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