Correlation Between ProShares Big and SPDR SP
Can any of the company-specific risk be diversified away by investing in both ProShares Big and SPDR SP 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 Big and SPDR SP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Big Data and SPDR SP Health, you can compare the effects of market volatilities on ProShares Big and SPDR SP 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 Big with a short position of SPDR SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Big and SPDR SP.
Diversification Opportunities for ProShares Big and SPDR SP
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ProShares and SPDR is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Big Data and SPDR SP Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SP Health and ProShares Big 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 Big Data are associated (or correlated) with SPDR SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SP Health has no effect on the direction of ProShares Big i.e., ProShares Big and SPDR SP go up and down completely randomly.
Pair Corralation between ProShares Big and SPDR SP
Considering the 90-day investment horizon ProShares Big Data is expected to generate 1.36 times more return on investment than SPDR SP. However, ProShares Big is 1.36 times more volatile than SPDR SP Health. It trades about 0.62 of its potential returns per unit of risk. SPDR SP Health is currently generating about 0.19 per unit of risk. If you would invest 3,612 in ProShares Big Data on August 24, 2024 and sell it today you would earn a total of 819.00 from holding ProShares Big Data or generate 22.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Big Data vs. SPDR SP Health
Performance |
| Timeline |
| ProShares Big Data |
| SPDR SP Health |
ProShares Big and SPDR SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Big and SPDR SP
The main advantage of trading using opposite ProShares Big and SPDR SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Big position performs unexpectedly, SPDR SP 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 SPDR SP will offset losses from the drop in SPDR SP's long position.| ProShares Big vs. SPDR SP Health | ProShares Big vs. SPDR SP Health | ProShares Big vs. Aquagold International | ProShares Big vs. Morningstar Unconstrained Allocation |
| SPDR SP vs. SPDR SP Health | SPDR SP vs. SPDR SP Software | SPDR SP vs. Invesco SP SmallCap | SPDR SP vs. SPDR SP Pharmaceuticals |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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