Correlation Between DB Gold and ProShares UltraShort
Can any of the company-specific risk be diversified away by investing in both DB Gold and ProShares UltraShort 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 DB Gold and ProShares UltraShort into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DB Gold Double and ProShares UltraShort Silver, you can compare the effects of market volatilities on DB Gold and ProShares UltraShort 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 DB Gold with a short position of ProShares UltraShort. Check out your portfolio center. Please also check ongoing floating volatility patterns of DB Gold and ProShares UltraShort.
Diversification Opportunities for DB Gold and ProShares UltraShort
-0.93 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between DGP and ProShares is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding DB Gold Double and ProShares UltraShort Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares UltraShort and DB Gold 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 DB Gold Double are associated (or correlated) with ProShares UltraShort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares UltraShort has no effect on the direction of DB Gold i.e., DB Gold and ProShares UltraShort go up and down completely randomly.
Pair Corralation between DB Gold and ProShares UltraShort
Considering the 90-day investment horizon DB Gold Double is expected to under-perform the ProShares UltraShort. But the etf apears to be less risky and, when comparing its historical volatility, DB Gold Double is 1.36 times less risky than ProShares UltraShort. The etf trades about -0.13 of its potential returns per unit of risk. The ProShares UltraShort Silver is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 3,208 in ProShares UltraShort Silver on August 29, 2024 and sell it today you would earn a total of 652.00 from holding ProShares UltraShort Silver or generate 20.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DB Gold Double vs. ProShares UltraShort Silver
Performance |
| Timeline |
| DB Gold Double |
| ProShares UltraShort |
DB Gold and ProShares UltraShort Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DB Gold and ProShares UltraShort
The main advantage of trading using opposite DB Gold and ProShares UltraShort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DB Gold position performs unexpectedly, ProShares UltraShort 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 UltraShort will offset losses from the drop in ProShares UltraShort's long position.| DB Gold vs. DB Gold Double | DB Gold vs. ProShares Ultra Gold | DB Gold vs. DB Gold Short | DB Gold vs. ProShares Ultra Silver |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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