Correlation Between ProShares Ultra and Dimensional ETF
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and Dimensional ETF 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 Dimensional ETF 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 Dimensional ETF Trust, you can compare the effects of market volatilities on ProShares Ultra and Dimensional ETF 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 Dimensional ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and Dimensional ETF.
Diversification Opportunities for ProShares Ultra and Dimensional ETF
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ProShares and Dimensional is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Oil and Dimensional ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dimensional ETF Trust 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 Dimensional ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dimensional ETF Trust has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and Dimensional ETF go up and down completely randomly.
Pair Corralation between ProShares Ultra and Dimensional ETF
Considering the 90-day investment horizon ProShares Ultra Oil is expected to generate 6.44 times more return on investment than Dimensional ETF. However, ProShares Ultra is 6.44 times more volatile than Dimensional ETF Trust. It trades about 0.05 of its potential returns per unit of risk. Dimensional ETF Trust is currently generating about 0.11 per unit of risk. If you would invest 3,716 in ProShares Ultra Oil on August 26, 2024 and sell it today you would earn a total of 931.00 from holding ProShares Ultra Oil or generate 25.05% 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. Dimensional ETF Trust
Performance |
| Timeline |
| ProShares Ultra Oil |
| Dimensional ETF Trust |
ProShares Ultra and Dimensional ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and Dimensional ETF
The main advantage of trading using opposite ProShares Ultra and Dimensional ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, Dimensional ETF 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 Dimensional ETF will offset losses from the drop in Dimensional ETF's long position.| ProShares Ultra vs. Direxion Daily SP | ProShares Ultra vs. Direxion Daily Semiconductor | ProShares Ultra vs. Direxion Daily Semiconductor |
| Dimensional ETF vs. iShares MSCI EAFE | Dimensional ETF vs. iShares iBoxx Investment | Dimensional ETF vs. iShares TIPS Bond | Dimensional ETF vs. iShares 1 3 Year |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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