Correlation Between ProShares Long and Amplify Online
Can any of the company-specific risk be diversified away by investing in both ProShares Long and Amplify Online 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 ProShares Long and Amplify Online into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Long OnlineShort and Amplify Online Retail, you can compare the effects of market volatilities on ProShares Long and Amplify Online 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 ProShares Long with a short position of Amplify Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Long and Amplify Online.
Diversification Opportunities for ProShares Long and Amplify Online
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ProShares and Amplify is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Long OnlineShort and Amplify Online Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amplify Online Retail and ProShares Long 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 ProShares Long OnlineShort are associated (or correlated) with Amplify Online. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amplify Online Retail has no effect on the direction of ProShares Long i.e., ProShares Long and Amplify Online go up and down completely randomly.
Pair Corralation between ProShares Long and Amplify Online
Given the investment horizon of 90 days ProShares Long OnlineShort is expected to generate 0.75 times more return on investment than Amplify Online. However, ProShares Long OnlineShort is 1.33 times less risky than Amplify Online. It trades about -0.07 of its potential returns per unit of risk. Amplify Online Retail is currently generating about -0.16 per unit of risk. If you would invest 4,787 in ProShares Long OnlineShort on December 31, 2024 and sell it today you would lose (119.00) from holding ProShares Long OnlineShort or give up 2.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Long OnlineShort vs. Amplify Online Retail
Performance |
| Timeline |
| ProShares Long Onlin |
| Amplify Online Retail |
ProShares Long and Amplify Online Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Long and Amplify Online
The main advantage of trading using opposite ProShares Long and Amplify Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Long position performs unexpectedly, Amplify Online 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 Amplify Online will offset losses from the drop in Amplify Online's long position.| ProShares Long vs. ProShares Online Retail | ||
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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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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