Correlation Between ProShares and IndexIQ ETF
Can any of the company-specific risk be diversified away by investing in both ProShares and IndexIQ ETF 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 and IndexIQ ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares SP Kensho and IndexIQ ETF Trust, you can compare the effects of market volatilities on ProShares and IndexIQ ETF 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 with a short position of IndexIQ ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares and IndexIQ ETF.
Diversification Opportunities for ProShares and IndexIQ ETF
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ProShares and IndexIQ is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding ProShares SP Kensho and IndexIQ ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IndexIQ ETF Trust and ProShares 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 SP Kensho are associated (or correlated) with IndexIQ ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IndexIQ ETF Trust has no effect on the direction of ProShares i.e., ProShares and IndexIQ ETF go up and down completely randomly.
Pair Corralation between ProShares and IndexIQ ETF
Given the investment horizon of 90 days ProShares SP Kensho is expected to generate 2.73 times more return on investment than IndexIQ ETF. However, ProShares is 2.73 times more volatile than IndexIQ ETF Trust. It trades about 0.12 of its potential returns per unit of risk. IndexIQ ETF Trust is currently generating about -0.18 per unit of risk. If you would invest 2,127 in ProShares SP Kensho on August 30, 2024 and sell it today you would earn a total of 135.00 from holding ProShares SP Kensho or generate 6.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares SP Kensho vs. IndexIQ ETF Trust
Performance |
| Timeline |
| ProShares SP Kensho |
| IndexIQ ETF Trust |
ProShares and IndexIQ ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares and IndexIQ ETF
The main advantage of trading using opposite ProShares and IndexIQ ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares position performs unexpectedly, IndexIQ ETF 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 IndexIQ ETF will offset losses from the drop in IndexIQ ETF's long position.| ProShares vs. Nexalin Technology | ProShares vs. Kilroy Realty Corp | ProShares vs. Highwoods Properties | ProShares vs. Karat Packaging |
| IndexIQ ETF vs. Materials Select Sector | IndexIQ ETF vs. Consumer Discretionary Select | IndexIQ ETF vs. Consumer Staples Select | IndexIQ ETF vs. Health Care Select |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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