Correlation Between ProShares Ultra and BNY Mellon
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and BNY Mellon 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 BNY Mellon 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 BNY Mellon International, you can compare the effects of market volatilities on ProShares Ultra and BNY Mellon 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 BNY Mellon. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and BNY Mellon.
Diversification Opportunities for ProShares Ultra and BNY Mellon
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ProShares and BNY is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Oil and BNY Mellon International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BNY Mellon International 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 BNY Mellon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BNY Mellon International has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and BNY Mellon go up and down completely randomly.
Pair Corralation between ProShares Ultra and BNY Mellon
Considering the 90-day investment horizon ProShares Ultra Oil is expected to generate 2.85 times more return on investment than BNY Mellon. However, ProShares Ultra is 2.85 times more volatile than BNY Mellon International. It trades about 0.05 of its potential returns per unit of risk. BNY Mellon International is currently generating about 0.05 per unit of risk. If you would invest 3,192 in ProShares Ultra Oil on August 26, 2024 and sell it today you would earn a total of 1,455 from holding ProShares Ultra Oil or generate 45.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Ultra Oil vs. BNY Mellon International
Performance |
| Timeline |
| ProShares Ultra Oil |
| BNY Mellon International |
ProShares Ultra and BNY Mellon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and BNY Mellon
The main advantage of trading using opposite ProShares Ultra and BNY Mellon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, BNY Mellon 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 BNY Mellon will offset losses from the drop in BNY Mellon's long position.| ProShares Ultra vs. Direxion Daily SP | ProShares Ultra vs. Direxion Daily Semiconductor | ProShares Ultra vs. Direxion Daily Semiconductor |
| BNY Mellon vs. Dimensional Core Equity | BNY Mellon vs. Dimensional Emerging Core | BNY Mellon vs. Dimensional Targeted Value | BNY Mellon vs. Dimensional Small Cap |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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