Correlation Between Dupont De and ProShares Ultra
Can any of the company-specific risk be diversified away by investing in both Dupont De 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 Dupont De and ProShares Ultra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dupont De Nemours and ProShares Ultra Oil, you can compare the effects of market volatilities on Dupont De 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 Dupont De with a short position of ProShares Ultra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and ProShares Ultra.
Diversification Opportunities for Dupont De and ProShares Ultra
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Dupont and ProShares is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and ProShares Ultra Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Ultra Oil and Dupont De 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 Dupont De Nemours 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 Oil has no effect on the direction of Dupont De i.e., Dupont De and ProShares Ultra go up and down completely randomly.
Pair Corralation between Dupont De and ProShares Ultra
Allowing for the 90-day total investment horizon Dupont De is expected to generate 1.06 times less return on investment than ProShares Ultra. But when comparing it to its historical volatility, Dupont De Nemours is 1.66 times less risky than ProShares Ultra. It trades about 0.03 of its potential returns per unit of risk. ProShares Ultra Oil is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 4,162 in ProShares Ultra Oil on August 26, 2024 and sell it today you would earn a total of 485.00 from holding ProShares Ultra Oil or generate 11.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dupont De Nemours vs. ProShares Ultra Oil
Performance |
| Timeline |
| Dupont De Nemours |
| ProShares Ultra Oil |
Dupont De and ProShares Ultra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and ProShares Ultra
The main advantage of trading using opposite Dupont De and ProShares Ultra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De 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.| Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide | Dupont De vs. LyondellBasell Industries NV |
| ProShares Ultra vs. Direxion Daily SP | ProShares Ultra vs. Direxion Daily Semiconductor | ProShares Ultra vs. Direxion Daily Semiconductor |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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