Correlation Between Citizens and ProShares UltraShort

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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

CitizensProSharesDiversified AwayCitizensProSharesDiversified Away100%
-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 Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy95.24%
ValuesDaily Returns

Citizens  vs.  ProShares UltraShort Gold

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -25-20-15-10-50510
JavaScript chart by amCharts 3.21.15CIA GLL
       Timeline  
Citizens 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Citizens are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak forward indicators, Citizens sustained solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15JanFebMarFebMar44.555.5
ProShares UltraShort Gold 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days ProShares UltraShort Gold has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Etf's essential indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the ETF venture institutional investors.
JavaScript chart by amCharts 3.21.15JanFebMarFebMar14.51515.51616.51717.518

Citizens and ProShares UltraShort Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-11.5-8.61-5.73-2.84-0.04812.815.728.6211.5314.44 0.020.040.060.08
JavaScript chart by amCharts 3.21.15CIA GLL
       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.
The idea behind Citizens and ProShares UltraShort Gold pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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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