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 Short and ProShares UltraShort Bloomberg, 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
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between DGZ and ProShares is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding DB Gold Short and ProShares UltraShort Bloomberg 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 Short 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 Short is expected to generate 0.49 times more return on investment than ProShares UltraShort. However, DB Gold Short is 2.06 times less risky than ProShares UltraShort. It trades about -0.02 of its potential returns per unit of risk. ProShares UltraShort Bloomberg is currently generating about -0.02 per unit of risk. If you would invest 991.00 in DB Gold Short on August 31, 2024 and sell it today you would lose (151.00) from holding DB Gold Short or give up 15.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
DB Gold Short vs. ProShares UltraShort Bloomberg
Performance |
| Timeline |
| DB Gold Short |
| 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. ProShares UltraShort Bloomberg | DB Gold vs. ProShares UltraShort Silver | DB Gold vs. MicroSectors Gold Miners | DB Gold vs. UBS ETRACS |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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