Correlation Between ProShares Ultra and JPMorgan BetaBuilders
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and JPMorgan BetaBuilders 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 JPMorgan BetaBuilders into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Ultra Oil and JPMorgan BetaBuilders Europe, you can compare the effects of market volatilities on ProShares Ultra and JPMorgan BetaBuilders 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 JPMorgan BetaBuilders. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and JPMorgan BetaBuilders.
Diversification Opportunities for ProShares Ultra and JPMorgan BetaBuilders
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ProShares and JPMorgan is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Oil and JPMorgan BetaBuilders Europe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan BetaBuilders 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 Oil are associated (or correlated) with JPMorgan BetaBuilders. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan BetaBuilders has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and JPMorgan BetaBuilders go up and down completely randomly.
Pair Corralation between ProShares Ultra and JPMorgan BetaBuilders
Considering the 90-day investment horizon ProShares Ultra Oil is expected to generate 2.97 times more return on investment than JPMorgan BetaBuilders. However, ProShares Ultra is 2.97 times more volatile than JPMorgan BetaBuilders Europe. It trades about 0.26 of its potential returns per unit of risk. JPMorgan BetaBuilders Europe is currently generating about -0.28 per unit of risk. If you would invest 3,641 in ProShares Ultra Oil on August 27, 2024 and sell it today you would earn a total of 1,006 from holding ProShares Ultra Oil or generate 27.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Ultra Oil vs. JPMorgan BetaBuilders Europe
Performance |
| Timeline |
| ProShares Ultra Oil |
| JPMorgan BetaBuilders |
ProShares Ultra and JPMorgan BetaBuilders Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and JPMorgan BetaBuilders
The main advantage of trading using opposite ProShares Ultra and JPMorgan BetaBuilders positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, JPMorgan BetaBuilders 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 JPMorgan BetaBuilders will offset losses from the drop in JPMorgan BetaBuilders' long position.| ProShares Ultra vs. ProShares UltraShort Oil | ProShares Ultra vs. ProShares Ultra Basic | ProShares Ultra vs. ProShares Ultra Financials | ProShares Ultra vs. ProShares Ultra Real |
| JPMorgan BetaBuilders vs. WisdomTree International Hedged | JPMorgan BetaBuilders vs. WisdomTree Emerging Markets | JPMorgan BetaBuilders vs. WisdomTree Dynamic Currency |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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