Correlation Between ProShares Ultra and Nations VolDex
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and Nations VolDex 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 Ultra and Nations VolDex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Ultra Dow30 and Nations VolDex, you can compare the effects of market volatilities on ProShares Ultra and Nations VolDex 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 Ultra with a short position of Nations VolDex. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and Nations VolDex.
Diversification Opportunities for ProShares Ultra and Nations VolDex
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ProShares and Nations is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Dow30 and Nations VolDex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nations VolDex and ProShares Ultra 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 Ultra Dow30 are associated (or correlated) with Nations VolDex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nations VolDex has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and Nations VolDex go up and down completely randomly.
Pair Corralation between ProShares Ultra and Nations VolDex
Considering the 90-day investment horizon ProShares Ultra Dow30 is expected to generate 0.23 times more return on investment than Nations VolDex. However, ProShares Ultra Dow30 is 4.43 times less risky than Nations VolDex. It trades about 0.07 of its potential returns per unit of risk. Nations VolDex is currently generating about 0.01 per unit of risk. If you would invest 6,720 in ProShares Ultra Dow30 on September 3, 2024 and sell it today you would earn a total of 4,002 from holding ProShares Ultra Dow30 or generate 59.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 96.87% |
| Values | Daily Returns |
ProShares Ultra Dow30 vs. Nations VolDex
Performance |
| Timeline |
ProShares Ultra and Nations VolDex Volatility Contrast
Predicted Return Density |
| Returns |
ProShares Ultra Dow30
Pair trading matchups for ProShares Ultra
Nations VolDex
Pair trading matchups for Nations VolDex
Pair Trading with ProShares Ultra and Nations VolDex
The main advantage of trading using opposite ProShares Ultra and Nations VolDex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, Nations VolDex 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 Nations VolDex will offset losses from the drop in Nations VolDex's long position.| ProShares Ultra vs. ProShares Ultra SP500 | ProShares Ultra vs. Direxion Daily SP500 | ProShares Ultra vs. ProShares Ultra QQQ | ProShares Ultra vs. Direxion Daily SP |
| Nations VolDex vs. Brunswick | Nations VolDex vs. Marine Products | Nations VolDex vs. Alta Equipment Group | Nations VolDex vs. China Aircraft Leasing |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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