Correlation Between Invesco DB and ProShares Ultra
Can any of the company-specific risk be diversified away by investing in both Invesco DB 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 Invesco DB and ProShares Ultra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco DB Energy and ProShares Ultra Bloomberg, you can compare the effects of market volatilities on Invesco DB 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 Invesco DB with a short position of ProShares Ultra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco DB and ProShares Ultra.
Diversification Opportunities for Invesco DB and ProShares Ultra
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Invesco and ProShares is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Invesco DB Energy and ProShares Ultra Bloomberg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Ultra Bloomberg and Invesco DB 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 Invesco DB Energy 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 Bloomberg has no effect on the direction of Invesco DB i.e., Invesco DB and ProShares Ultra go up and down completely randomly.
Pair Corralation between Invesco DB and ProShares Ultra
Considering the 90-day investment horizon Invesco DB Energy is expected to generate 0.21 times more return on investment than ProShares Ultra. However, Invesco DB Energy is 4.68 times less risky than ProShares Ultra. It trades about -0.01 of its potential returns per unit of risk. ProShares Ultra Bloomberg is currently generating about -0.05 per unit of risk. If you would invest 1,997 in Invesco DB Energy on August 29, 2024 and sell it today you would lose (84.00) from holding Invesco DB Energy or give up 4.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco DB Energy vs. ProShares Ultra Bloomberg
Performance |
| Timeline |
| Invesco DB Energy |
| ProShares Ultra Bloomberg |
Invesco DB and ProShares Ultra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco DB and ProShares Ultra
The main advantage of trading using opposite Invesco DB and ProShares Ultra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco DB 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.| Invesco DB vs. Invesco DB Precious | Invesco DB vs. Invesco DB Base | Invesco DB vs. Invesco DB Oil | Invesco DB vs. Invesco DB Agriculture |
| ProShares Ultra vs. United States Brent | ProShares Ultra vs. ProShares K 1 Free | ProShares Ultra vs. Invesco DB Energy | ProShares Ultra vs. Invesco DB Oil |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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