Correlation Between ProShares Ultra and BrandywineGLOBAL
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and BrandywineGLOBAL 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 BrandywineGLOBAL 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 BrandywineGLOBAL Dynamic, you can compare the effects of market volatilities on ProShares Ultra and BrandywineGLOBAL 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 BrandywineGLOBAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and BrandywineGLOBAL.
Diversification Opportunities for ProShares Ultra and BrandywineGLOBAL
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ProShares and BrandywineGLOBAL is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Oil and BrandywineGLOBAL Dynamic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BrandywineGLOBAL D 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 BrandywineGLOBAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BrandywineGLOBAL D has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and BrandywineGLOBAL go up and down completely randomly.
Pair Corralation between ProShares Ultra and BrandywineGLOBAL
Considering the 90-day investment horizon ProShares Ultra Oil is expected to generate 2.29 times more return on investment than BrandywineGLOBAL. However, ProShares Ultra is 2.29 times more volatile than BrandywineGLOBAL Dynamic. It trades about 0.26 of its potential returns per unit of risk. BrandywineGLOBAL Dynamic is currently generating about 0.25 per unit of risk. If you would invest 3,943 in ProShares Ultra Oil on August 28, 2024 and sell it today you would earn a total of 521.00 from holding ProShares Ultra Oil or generate 13.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Ultra Oil vs. BrandywineGLOBAL Dynamic
Performance |
| Timeline |
| ProShares Ultra Oil |
| BrandywineGLOBAL D |
ProShares Ultra and BrandywineGLOBAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and BrandywineGLOBAL
The main advantage of trading using opposite ProShares Ultra and BrandywineGLOBAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, BrandywineGLOBAL 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 BrandywineGLOBAL will offset losses from the drop in BrandywineGLOBAL's 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 |
| BrandywineGLOBAL vs. BlackRock ETF Trust | BrandywineGLOBAL vs. Rbb Fund | BrandywineGLOBAL vs. Virtus ETF Trust | BrandywineGLOBAL vs. Amplify CWP Enhanced |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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