Correlation Between First Trust and ProShares Ultra
Can any of the company-specific risk be diversified away by investing in both First Trust 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 First Trust and ProShares Ultra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust SkyBridge and ProShares Ultra MSCI, you can compare the effects of market volatilities on First Trust 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 First Trust with a short position of ProShares Ultra. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and ProShares Ultra.
Diversification Opportunities for First Trust and ProShares Ultra
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between First and ProShares is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding First Trust SkyBridge and ProShares Ultra MSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Ultra MSCI and First Trust 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 First Trust SkyBridge 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 MSCI has no effect on the direction of First Trust i.e., First Trust and ProShares Ultra go up and down completely randomly.
Pair Corralation between First Trust and ProShares Ultra
Given the investment horizon of 90 days First Trust SkyBridge is expected to generate 3.13 times more return on investment than ProShares Ultra. However, First Trust is 3.13 times more volatile than ProShares Ultra MSCI. It trades about 0.11 of its potential returns per unit of risk. ProShares Ultra MSCI is currently generating about 0.04 per unit of risk. If you would invest 533.00 in First Trust SkyBridge on September 3, 2024 and sell it today you would earn a total of 1,511 from holding First Trust SkyBridge or generate 283.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Trust SkyBridge vs. ProShares Ultra MSCI
Performance |
| Timeline |
| First Trust SkyBridge |
| ProShares Ultra MSCI |
First Trust and ProShares Ultra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and ProShares Ultra
The main advantage of trading using opposite First Trust and ProShares Ultra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust 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.| First Trust vs. VanEck Digital Transformation | First Trust vs. Bitwise Crypto Industry | First Trust vs. Global X Blockchain | First Trust vs. First Trust Indxx |
| ProShares Ultra vs. ProShares Ultra SP500 | ProShares Ultra vs. Direxion Daily SP500 | ProShares Ultra vs. ProShares Ultra QQQ | ProShares Ultra vs. Direxion Daily SP |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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