Correlation Between ProShares Ultra and Fidelity International
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and Fidelity International 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 Fidelity International 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 Fidelity International Multifactor, you can compare the effects of market volatilities on ProShares Ultra and Fidelity International 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 Fidelity International. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and Fidelity International.
Diversification Opportunities for ProShares Ultra and Fidelity International
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ProShares and Fidelity is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Oil and Fidelity International Multifa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity 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 Fidelity International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity International has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and Fidelity International go up and down completely randomly.
Pair Corralation between ProShares Ultra and Fidelity International
Considering the 90-day investment horizon ProShares Ultra Oil is expected to generate 3.58 times more return on investment than Fidelity International. However, ProShares Ultra is 3.58 times more volatile than Fidelity International Multifactor. It trades about 0.3 of its potential returns per unit of risk. Fidelity International Multifactor is currently generating about 0.09 per unit of risk. If you would invest 3,890 in ProShares Ultra Oil on September 1, 2024 and sell it today you would earn a total of 580.00 from holding ProShares Ultra Oil or generate 14.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
ProShares Ultra Oil vs. Fidelity International Multifa
Performance |
| Timeline |
| ProShares Ultra Oil |
| Fidelity International |
ProShares Ultra and Fidelity International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and Fidelity International
The main advantage of trading using opposite ProShares Ultra and Fidelity International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, Fidelity International 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 Fidelity International will offset losses from the drop in Fidelity International'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 |
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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