Correlation Between ProShares Ultra and IShares ESG
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and IShares ESG 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 IShares ESG 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 iShares ESG Aggregate, you can compare the effects of market volatilities on ProShares Ultra and IShares ESG 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 IShares ESG. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and IShares ESG.
Diversification Opportunities for ProShares Ultra and IShares ESG
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ProShares and IShares is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Oil and iShares ESG Aggregate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares ESG Aggregate 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 IShares ESG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares ESG Aggregate has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and IShares ESG go up and down completely randomly.
Pair Corralation between ProShares Ultra and IShares ESG
Considering the 90-day investment horizon ProShares Ultra Oil is expected to generate 6.23 times more return on investment than IShares ESG. However, ProShares Ultra is 6.23 times more volatile than iShares ESG Aggregate. It trades about 0.24 of its potential returns per unit of risk. iShares ESG Aggregate is currently generating about 0.04 per unit of risk. If you would invest 3,943 in ProShares Ultra Oil on August 29, 2024 and sell it today you would earn a total of 503.00 from holding ProShares Ultra Oil or generate 12.76% 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. iShares ESG Aggregate
Performance |
| Timeline |
| ProShares Ultra Oil |
| iShares ESG Aggregate |
ProShares Ultra and IShares ESG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and IShares ESG
The main advantage of trading using opposite ProShares Ultra and IShares ESG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, IShares ESG 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 IShares ESG will offset losses from the drop in IShares ESG'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 |
| IShares ESG vs. iShares ESG 1 5 | IShares ESG vs. iShares ESG USD | IShares ESG vs. iShares ESG Aware | IShares ESG vs. iShares ESG Aware |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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